While bottled up, tax rebate still grows

By Cy Ryan

Tuesday, Dec. 9, 2008 | 2 a.m.

The battle between the Nevada Tax Commission and Southern California Edison over a $70 million rebate hasn’t ended despite the commission’s ruling last week to deny the rebate.

The case, which centers on the company’s use of out-of-state coal at its now-closed Laughlin power plant, is expected to end up in court.

The further delays mean the amount of the potential refund will go even higher. Dino DiCianno, executive director of the Nevada Taxation Department, said $254,000 in interest is accumulating each month.

The disputed tax amount totaled $50.8 million, but with interest it now stands at $70 million.

The company is seeking a refund on sales taxes paid on coal purchases from 1998 to 2005. Southern California Edison argues the coal should be exempt because it was transported to the Mojave Generating Station in Laughlin from Arizona.

Last week’s vote by the commission was to deny a refund it had granted in 2005. The Nevada Supreme Court ruled the commission had violated the open meeting law in 2005 by discussing and voting on the matter behind closed doors.

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Assembly Speaker Barbara Buckley wants to end tax abatements and exemptions that take money from public school coffers.

Although the special session has occupied state leaders’ attention of late, they’ve still been making plans for the 2009 Legislature and how they’ll deal with the state’s ongoing fiscal crisis.

Buckley, D-Las Vegas, is questioning the need to offer incentives to new businesses and for environmentally sensitive construction projects at a time when Nevada ranks 47th nationally in funding for education.

She plans to examine scores of other tax breaks and has asked that a bill be drafted that would end them.

Research is being done on how much such a move would benefit schools, but it would be in the millions of dollars.

She was careful to note she is not considering ending the sales tax exemption on food.

The tax breaks not only hurt students but also limit the development of an educated work force, she said.

The state can’t get a handle on its budget with all the tax exemptions and incentives, she said.

The money could be used to establish a “rainy day” fund for schools so that during future economic downturns education would not be hit by budget cuts, she said.

Public schools are financed primarily through property and sales taxes.

After gathering information at town hall meetings across the state, Buckley said, she learned residents think education should be a higher priority for state leaders.

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Gov. Jim Gibbons is learning firsthand the bleak state of Nevada’s real estate market.

The governor, who is divorcing his wife, Dawn, is attempting to sell their Reno home.

“I actually showed it the other day and it was amazing,” Gibbons said.

A friend who would like to move into the southwest Reno neighborhood checked out the house. But the friend must first sell his home, Gibbons said.

“You know, it’s not an easy process,” he said.

The governor last month listed the four-bedroom home on 2.96 acres and is asking $1.4 million.