As elsewhere stated, general improvement districts (“GIDs”) are limited purpose special districts along the lines of vector control (mosquitos), library, fire, water, sewer and cemetery districts. In Nevada hey are creatures of statute set forth at Title 25¹ of Chapter NRS 318. So are GIDs authorized to levy taxes and if so, what kind²?

Nev. Const. Art. 8, Sec. 8: As elsewhere discussed, we begin our analysis with the Nevada Constitution given it “is the ‘supreme law of the state which ‘control[s] over any conflicting statutory provisions.’”³ Nev. Const. Art. 8, Sec. 8 instructs that the Legislature shall provide for/restrict the powers of all general purpose governments. Since the Legislature has created the GID law⁴, and the Incline Village General Improvement District (“IVGID”) is a GID⁵, IVGID’s powers are recognized/restricted by NRS 318.

Dillon’s Rule: Also as elsewhere discussed, since Nevada is a Dillon’s Rule State⁶, we refresh the reader’s recollection of Dillon’s Rule. That is, a local government’s powers are limited and only extend to those which are: 1) granted in express words; 2) necessarily implied or…incident to…powers expressly granted; and, 3) absolutely essential to the declared objects and purposes of the (municipal) corporation – not simply convenient, but indispensable⁷. The rule also states that any reasonable doubt by the court as to whether a power has been granted will be ruled against the local government.”⁸ Therefore the question: what taxes are a GID Board permitted to levy based upon express language contained in NRS 318?

Ad Valorem Taxes: It turns out general ad valorem real property taxes are the only ones GIDs are authorized to levy⁹. An ad valorem tax is defined as one applying a tax rate to a property’s assessed valuation¹⁰. Given Recreation (“RFF”) and Beach (“BFF”) Facility Fees are fixed, uniform in amounts per parcel, they cannot be ad valorem taxes. Notwithstanding, since the District has the power to levy ad valorem taxes³, they may be adopted, collected and “expended at the discretion of the local government’s governing body, on any programs or services.”¹¹

Special Taxes: according to Merriam-Webster, are taxes “levied to fund a particular government project or program.” Such as public recreation or the beaches insofar as the Incline Village General Improvement District (“IVGID”) is concerned. However in Nevada, there is no NRS authority for levying a special tax against real property. So even if the RFF/BFF are taxes, they cannot be recoverable special taxes.

Resolutions The Equivalent of Special or Local Laws Which Adopt Exactions Which Operate Non-Uniformly Throughout The State: Since this subject is thoroughly examined at our web page by the same name, rather than repeating ourselves, we simply refer the reader to this discussion. However with that said, even if the RFF/BFF are taxes, they are not recoverable as unconstitutional taxes.

Ad Valorem Tax Rates: Each year the Committee on Local Government Finance¹² (“CLGF”) publishes a Redbook which reports “Property Tax Rates For Nevada Local Governments.” The current fiscal year’s Redbook which also reports the equalization of tax rates was prepared on June 27, 2022. According to Schedule A-11, the District’s combined ad valorem tax rate for fiscal year 2022-23 was $3.4778 per $100 of assessed valuation. Of that $3.4778 the District’s portion was only $0.1249 per $100 of assessed valuation¹³ To evaluate the yearly “creep” in this rate, consider that in 2005 the District’s tax rate was only $0.0741 per $100 of assessed valuation¹⁴. Currently, only $0.1922 per $100 of assessed valuation remains as a maximum “cap” which is less than the RFF/BFF.

Property Tax Limitations: Given the District tells the public it collects the RFF/BFF against those parcels it contends are specially benefited¹⁵, if they are “taxes” rather than “fees,” we believe NRS 361.445 comes into play. NRS 361.445 is clear in instructing that “the only basis for property taxation by any…district in that county…shall be…the assessment made by the county assessor and…the Department (of Taxation), as equalized according to law.” Putting aside the question of whether the RFF/BFF are adopted as a result of “assessment made by the county assessor and…the Department (of Taxation),” in overlapping or combined taxing districts like IVGID¹⁶, the Department of Taxation (“NDOT”) is charged with equalizing maximum tax rates¹⁷ to comply with the statutory tax rate cap of $3.64 per $100 of assessed valuation¹⁸. As aforesaid, according to Schedule A-11 of the current fiscal year’s Redbook, the combined ad valorem tax rate for fiscal year 2022-23 for the District is $3.4778 per $100 of assessed valuation. That only leaves $0.1922 per $100 of assessed valuation as a maximum “cap.” So what happens to the statutory maximum tax rate once the District’s RFF/BFF have been added to the equation, assuming arguendo, they are taxes?

Property Tax Revenues: So how much in ad valorem property tax revenues does the District realize each year? According to page 52 of the District’s 2022 CAFR the number is $1,873,949. Deminimis when compared to the $41,222,922 of yearly operational revenues the District reports.¹⁹.

Conclusion: All GIDs have the power to levy ad valorem taxes³. And the District already levies close to the maximum amount it may permissibly levy. And now you know!

1. See Public Organizations for Community Service (go to https://www.leg.state.nv.us/nrs/).
2. There are many different types of “taxes” a governmental agency may have authority to levy. There can be income taxes, sales taxes. excise taxes, inventory taxes, real property taxes, personal property taxes, etc.
3. See Thomas v. Nev. Yellow Cab Corp., 130 Nev. Adv. Op. 52, 327 P.3d 518, 521 (2014).
4. See NRS 318.010.
5. NRS 318.015(1) instructs that “each district organized pursuant to the provisions of this chapter shall be a body corporate and politic…quasi-municipal corporation” and general improvement district.
6. In Nevada’s jurisprudence, the Nevada Supreme Court has adopted Dillon’s Rule [see Tucker v. Mayor and Bd. of Alderman, 4 Nev. 20, 26 (1868); State ex rel. Rosenstock v. Swift, 11 Nev. 128 (1876)].
7. Go to https://whyy.org/articles/what-is-home-rule/.
8. Go to https://www.nvbar.org/wp-content/uploads/NevLawyer_June_2013_Dillon’s_Rule.pdf. Also see NRS 244.137(4).
9. See NRS 318.225 which instructs: GID “board(s) shall have power and authority to levy and collect general (ad valorem) taxes on and against all taxable property within the district.”
10. See Solvang Mun. Improvement vs. Bd. of Supervisors, 112 Cal. App. 3d 545, 552, 169 Cal.Rptr. 391 (1980).
11. See the California Legislative Analyst’s Office (“LAO”) “Look at voter-approval requirements for local taxes.”
12. See NRS 354.105, et seq.
13. See Schedule B-10 of the current fiscal year’s Redbook.
14. See page 62 of the District’s 2014 Comprehensive Annual Financial Report (“CAFR”).
15. ¶3 of the resolution the Board approves pursuant to NRS 318.201(9) [see page 229 of the packet of materials prepared by staff in anticipation of the Board’s May 26, 2022 meeting (“the 5/26/2022 Board packet“)] recites that the report for collection of the RFF/BFF on the county tax roll adopted therein “contains all of the properties within the District that will be benefited.”
16. See Schedule D-10 of the current fiscal year’s Redbook.
17. See NRS 361.4547.
18. See NRS 361.453.
19. See page 25 of the District’s 2022 CAFR.