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What Are “Service Charges?”

IVGID 101 Posted on by

Only because the District tells us

The Recreation Facility Fee (“RFF”) and Beach Facility Fee (“BFF”) its Board adopts each year1 represent annual fiscal year “Recreation…Service Charges” for “the availability of the use of IVGID’s beaches; boat launch ramp; Championship golf course; Mountain golf course; tennis facilities; the Chateau and Aspen Grove; Diamond Peak Ski Resort, and Recreation Center,”2 and

NRS 318.197(1) instructs that general improvement district (“GID”) Boards have the power to

“Fix, and from time to time increase or decrease…recreational facilit(y)…rates, tolls or charges3 other than special assessments, including, but not limited to, service charges,”

Do we tackle the question proffered.

We begin our examination by recalling that just because the District tells us its recreation RFF/BFF are “service charges,” doesn’t necessarily make them so. That’s because

“Courts will determine and classify (monetary exactions of all kinds) on the basis of realities,”4 looking to their “operating incidence”5 rather than (their) specially descriptive phrase(s).”6

So in order to determine those realities, let’s examine NRS 318 and look for the definition of “service charge.” Nowhere is the term defined. What about anywhere else in the NRS? Same answer. Nowhere. What about in Nevada judicial decisions? To our knowledge, nowhere either. So we’re relegated to searching elsewhere. And this takes us to Dillon’s Rule7 and the established judicial rules for construing statutes8.

Dillon’s Rule instructs “that (a)…governing body…possesses and may exercise only the following powers and no others…Those…granted in express terms by the Nevada Constitution, statute or…charter.” Similarly, the judicial rules for construing statutes begin with a statute’s “plain language.”9 

Where plain and unambiguous on its face, it is not appropriate to resort to any ancillary construction aids10.

But neither of these rules is of assistance given as we’ve demonstrated, nowhere in the NRS is the term “service charge” availability” defined. Thus where as here the term is neither defined by statute nor a local government’s highest judicial authority,

It “ha(s) an accepted meaning in the area of law addressed(, or one which)…may have been borrowed from another statute11…or…accepted and specialized…at common law12 (inasmuch as) the accepted meaning governs and the word or phrase is considered a technical term or (one) ‘of art.’”13 Therefore, in the “absence of contrary direction(, it) may be taken as satisfaction with widely accepted definitions, (and) not as departure from them.”14

For these reasons, according to Investopedia, we learn that

A “service charge” is a “pre-determined, mandatory, and non-negotiable at the point of sale…fee collected to pay for a particular service…related to the primary product or service being purchased15. (In other words, it)…is…in addition to a standard or basic fee16, and “is typically collected when there are interactions between a consumer, and the company involved.”17

Moreover, “service charges come with different names depending on the industry.”18 Including

“Restaurants, banking…travel and tourism. (And) when collected, these charges may cover ‘services’ rendered to the (customer), or they may cover administrative or processing costs (associated therewith). (And) since service charges are paid directly to the (provider of a service,) they are different from tips which are paid to the (person) who (actually) renders the service.”

Additional examples of service charges would include

A fee at a (San Francisco) restaurant to pay for” employees’ health care costs18. At many hotels a “resort fee” is added to the cost of lodging for the availability of wi-fi, a couple of bottles of water per day, access to the facility’s swimming pool and fitness facilities, or at the Hyatt Lake Tahoe Hotel, the Diamond Peak Ski Shuttle! At Northstar it’s the “resort fee” all private businesses in the Village add to the prices for their food, product or services furnished. At financial institutions the charge can be “a monthly fee…(assessed) for maintaining a checking or savings account….In the airline industry(, it can be an additional charge)…to pay for services such as entertainment, baggage handling, seat selection, (a meal,) travel agent commissions, etc…In the utility industry(, it can be a charge)…in addition to the actual bill (itself) for power…used19. It can be an additional fee imposed for the privilege of using an Echeck or credit card to make payment. charge20. Or like Airbnb, it can be “an online rental platform that imposes ‘service charges’ to cover company costs.”18

Although there are very few judicial decisions which address “service charges” per se, one of the few that does is Compere v. Nusret Miami, LLC, .No. 20-12422 (11th Cir. 2022). There the court was asked to distinguish service charges from tips concluding that “the critical feature of a…charge, if any made for (a) service,” is it is an additional charge imposed by the provider of the product or service furnished.

Finally, just so the reader understands, given service charges are unrelated to charges for the purchase of product(s), service(s)” or facilities themselves, or for the “availability of service,”21 “based on the rights of the entity as proprietor of the instrumentalities used.”22 Therefore if one doesn’t pay charges to actually use a provider’s services, one doesn’t end up paying a “service charge” associated therewith.

And now you know!

  1. See that staff memorandum typically accompanying its request the RFF/BFF be adopted and collected on the county tax roll (by way of example, see that May 30, 2025 staff memorandum in support of possible approval of a resolution approving the Report for collection of Recreation Standby and Service Charges for fiscal year 2025/2026) which recites that “each year, the District establishes an annual Recreation Facility Fee and Beach Facility Fee.”
  2. See ¶¶4 and 4(b) of Resolution No. 1917 as well as ¶I of the the Report For Collection on The County Tax Roll of Recreation Standby And Service Charges adopted May 30, 2025 which fixes these fees “for the fiscal year 2025-26.”
  3. The term “rates, tolls or charges” represents different names for “specific services” for which “fixed price(s are) charged (see https://www.investopedia.com/terms/f/fee.asp). According to an AI search, a “rate is a fixed fee or cost per unit of service (often used for utilities like water or electricity); a toll is a fee paid for the use of a specific road, bridge, or tunnel, typically collected at designated points; and, a charge is a fee imposed for a service or product, which can vary based on usage or specific conditions.” The common denominator here being that all are fees!
  4. See Hukle v. City of Huntington, 134 W.Va. 249, 58 S.E.2d 780, 783 (1950); Clean Water Coalition v. The M Resort, LLC, 127 Nev. 301, 255 P. 3d 247, 256 (2011) citing State v. Medeiros, 89 Haw. 361, 973 P.2d 736, 741 (1999).
  5. See Emerson College v, City of Boston, 391 Mass. 415, 424-425, 462 N.E.2d 1098, 1105 (1984),
  6. See Stewarts’ Pharmacies v. Fase, 43 Haw. 131, 144 (1959) reh’g denied at 43 Haw. 166.
  7. See our How The Legislature Instructs We Construe The Limited Powers GIDs May Exercise discussion.
  8. See our How Courts Instruct We Construe Statutes Impacting GIDs discussion.
  9. See Arguello v. Sunset Station, Inc., 127 Nev. 365, 370, 252 P.3d 206, 209 (2011).
  10. See State Farm Mut. v. Comm’r of Ins, 114 Nev. 535, 540, 958 P.2d 733 (1998); Erwin v. State of Nevada, 111 Nev. 1535, 1538, 908 P.2d 1367, 1369 (1995) [quoting Charlie Brown Constr. Co. v. Boulder City, 106 Nev. 497, 503, 797 P.2d 946, 949 (1990)]; Washoe Med. Ctr. v. Second Jud. Dist. Ct., 122 Nev. 1298, 1302, 148 P.3d 790, 792-793 (2006).
  11. In appropriate circumstances, courts will assume that “adoption of the wording of a statute from another legislative jurisdiction carries with it the previous judicial interpretations of the wording” [see Carolene Products Co. v. United States, 323 U.S. 18, 26, 65 S.Ct. 1 (1944)].
  12. See Community for Creative Non-Violence v. Reid, 490 U.S. 730, 739-740, 109 S.Ct. 2166 (1989).
  13. See pages 7-8 of the Congressional Research Service, Larry M. Eig, Specialist in American Public Law, Statutory Interpretation: General Principles and Recent Trends (September 24, 2014).
  14. See Morissette v. United States, 342 U.S. 246, 263, 72 S.Ct. 240 (1952).
  15. Like a round of golf, a daily lift ticket at a ski area, or a day’s membership in a Recreation Center.
  16. See Merriam-Webster and Dictionary.com.
  17. Go to https://corporatefinanceinstitute.com/resources/wealth-management/service-charge/#:~:text=A%20service%20charge%2C%20also%20called,of%20a%20product%20or%20service.
  18. Go to https://www.sf.gov/information–section-k-health-surcharges-hcso-administrative-guidance.
  19. Look at your IVGID utility bill. In addition to charges for actual water used or capital improvement costs, you will discover a separate monthly “administrative” charge. In the credit card world this is service charge.
  20. “EChecks will be charged a flat rate of $1.50 per transaction…Credit cards will be charged a service fee of 2.45%” [go to https://www.yourtahoeplace.com/residents/water-sewer-bill-pay/].
  21. They are additional charges related to those primary charges for the purchase of product(s), service(s) or facilities themselves.
  22. See Emerson College v. City of Boston, 391 Mass. 415, 424-425, 462 N.E.2d 1098, 1105 (1984).

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