Las Vegas Sun

March 28, 2024

state government:

State treasurer frustrated by delay in taxing Fannie Mae, Freddie Mac

freddie mac

ASSOCIATED PRESS

Freddie Mac’s corporate offices are seen in McLean, Va. Freddie Mac was bailed out in 2008 and is now owned by taxpayers.

Click to enlarge photo

Kate Marshall

The state’s tax department hasn’t decided whether to drop a tax exemption for mortgage companies Fannie Mae and Freddie Mac three months after the state treasurer asked for a change in the rules that would garner an estimated $5 million a year for the state and schools.

A federal judge ruled in a Michigan case last month that Fannie Mae and Freddie Mac owed millions of dollars in county and state taxes that they had not paid when selling homes, according to press reports.

The delay in getting the rules changed in Nevada has frustrated Treasurer Kate Marshall.

“I would think you would have a priority to figure this situation out,” she said. “In my mind, every single day that has passed that we forgo collecting taxes from Fannie and Freddie comes at the expense of Nevada.”

Tax Department Director William Chisel said the department was aware of the federal court decision and is still considering how to proceed.

Fannie and Freddie were created by Congress in 1938 and 1970 to back residential mortgages. Their exemption from Nevada’s real property tax was confirmed in 2008 in a memo issued by the state’s Tax Department after a request for clarification from the Lyon County recorder’s office.

They claim that under their federal charters, they are exempt from state and local taxes. But Marshall argued that the real property transfer tax is akin to a sales tax and not covered by the exemption.

Additionally, Marshall argues in her letter that the companies are not “instruments” of the federal government, which would make them exempt.

U.S. District Judge Victoria Roberts ruled that the entities do have to pay taxes in Michigan and awarded back taxes for the past six years.

In Nevada, officials said the real property transfer tax yields about $500 on the sale of a $100,000 home in Clark County. The tax is divided among the state, county and the Clark County School District.

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