Nevada Lawmakers Worried About Rules for 'Green' Tax Breaks

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Nevada lawmakers who pressed for a new law lowering "green" tax breaks to ease projected revenue losses for state and local governments say they're concerned that proposed rules to implement the law are too broad.

Assemblywomen Debbie Smith, D-Sparks, and Marilyn Kirkpatrick, D-North Las Vegas, questioned draft rules aired Tuesday at a state Taxation Department workshop. The agency plans another session July

The two lawmakers said the proposed rules go beyond normal construction costs that would be entitled to the tax breaks, and list items such as cranes, hoists and other heavy equipment used on
but not "permanently incorporated into" a green project.

"If you broaden the scope of the basis for these sales tax exemptions, we're going backward," Smith said. "What I'm seeing is that the industry is proposing items for the exemption that don't meet with the intent of the Legislature."

"We worked hard during the 2007 session to rein in the windfall tax abatements on these green buildings and we want to make sure nobody takes advantage of the situation," Smith added.

Dino DiCianno, executive director of the Taxation Department, said he wants to make sure he complies with the lawmakers' intent. He also said quick action is needed on the regulations because many "green" projects already are under way.

"I knew this wasn't going to be easy," DiCianno added as the Monday workshop concluded.

AB621, the new law lowering the tax breaks, was approved after
lawmakers learned that a 2005 law could end up costing government
and schools $1 billion for about a dozen companies that had chosen to build large developments according to green building requirements.

The new law preserves substantial tax breaks, between 25 to 35 percent in property taxes for up to 10 years, but requires that developers meet higher standards for energy efficiency. The breaks
also do not apply to money owed to school districts. The bill also gets rid of sales tax exemptions on construction materials provided by the 2005 law.

Several companies will get the original tax reductions and the sales tax exemptions. Those companies must have planned construction projects by December 2005, and received approvals from state authorities before February 2007.

Both exempt and nonexempt companies will take a hit compared to what they were promised under the 2005 law, which offered tax breaks of up to 50 percent.

(Copyright 2007 by The Associated Press. All Rights Reserved.)