LOOKING IN ON: CARSON CITY

Wednesday, Oct. 4, 2006 | 7:47 a.m.

CARSON CITY - The companies that finance purchases of Harley-Davidson motorcycles and equipment must pay Nevada's 2 percent payroll tax, the state Supreme Court has ruled.

The court said the companies were financial institutions not entitled to the state's lower payroll tax for general business.

The tax on a general business payroll started in 2003 at 0.7 percent, was reduced to 0.65 percent and is now down to 0.63 percent.

Harley-Davidson Financial Companies' representatives argued that the firms were not financial institutions because they financed only the merchandise they sell.

But the Supreme Court pointed out that the companies finance motorcycles sold by independent dealers. The court also said the financial companies regularly sell their commercial paper to third parties for profit.

The 2 percent payroll tax applies only to employees in the financial business in Nevada. Their number was not disclosed in court records.

The ruling upheld the decision of District Judge William Maddox of Carson City, who ruled against Harley-Davidson Credit Corp., Eaglemark Savings Bank and Harley-Davidson Financial Services Inc.

The Nevada Supreme Court believes the Pledge of Allegiance can be recited at the start of a government meeting, even if it is not listed on the agenda.

In a footnote to an order, the court said Nevada's open meeting law requires an agenda to list topics to be considered or acted upon. "We fail to see how reciting the Pledge at the beginning of a public meeting implicates either requirement," the court wrote.

The issue arose when Gary Schmidt, vice chairman of the Washoe County Board of Equalization, filed suit to determine whether the agenda had to list the pledge.

Deputy District Attorney Peter Simeoni had said that reciting the pledge without it being included on the agenda was a violation of the open meeting law.

The high court, however, disagreed.

A district judge has ruled that the Nevada Tax Commission did not violate the state's open meeting law when it voted in private to give a $40 million tax refund to Southern California Edison.

District Judge Mike Griffin said there is a clear exception in the law that allows a person disputing his tax bill before the commission to request a closed session.

Attorney General George Chanos filed suit against the commission, seeking to void the refund and to require the commission to vote in public.

Chanos said his office is reviewing whether to appeal to the Nevada Supreme Court.

Thomas Wilson, a private Reno lawyer hired by the commission because of the conflict of interest with the attorney general's office filing suit, pointed out that between 1983 and 1997, the commission closed hearings upon the request of the party but voted in public.

From 1997 to 2005, the commission continued to close the meetings and vote in private - without objections from the deputy attorneys general assigned to the commission.

Griffin wrote that there were "two very strong competing public policies involved here" - the right of the public to open government and taxpayers' right to keep tax information confidential.

If the attorney general's position was followed, even if one part of a meeting was closed, confidential information could later become public if the vote occurred in open session, the judge said.

In 1979 the attorney general's office issued an opinion that said meetings should be open. But the Legislature in 1983 amended the law to allow the tax commission to close sessions at taxpayers' request.

The attorney general's argument, Griffin said, "destroys the meaning of the confidentiality statute."

In this case the commission held three meetings on the request and then voted on May 9, 2005, for the refund, overturning the recommendation of the director of the Nevada Tax Department.