AJR1 - Proposes to amend the Nevada Constitution to revise certain provisions relating to property taxes. (BDR C-185)

A.J.R. 1 - *AJR1* ASSEMBLY JOINT RESOLUTION NO. 1–ASSEMBLYMEMBER ANDERSON PREFILED JANUARY 22, 2025 ____________ Referred to Committee on Revenue SUMMARY—Proposes to amend the Nevada Constitution to revise certain provisions relating to property taxes. (BDR C-185) FISCAL NOTE: Effect on Local Government: May have Fiscal Impact. Effect on the State: Yes. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. ASSEMBLY JOINT RESOLUTION—Proposing to amend the Nevada Constitution to revise provisions relating to the assessment and taxation of real property which is sold or transferred and to require the Legislature to enact a program to provide property tax assistance to senior citizens and persons with disabilities. Legislative Counsel’s Digest: The Nevada Constitution requires the Legislature to provide by law for a 1 uniform and equal rate of assessment and taxation of property. (Nev. Const. Art. 2 10, § 1) 3 Under existing law, for the purpose of determining the amount of property tax 4 owed by the owner of a parcel of real property, the taxable value of the real 5 property is equal to the value of the land plus the replacement cost of the 6 improvements less all applicable depreciation and obsolescence. Depreciation of an 7 improvement is calculated at 1.5 percent for each year of adjusted actual age, up to 8 a maximum of 50 years. (NRS 361.227) Existing law also provides for a partial 9 abatement of property taxes, which has the effect of establishing an annual cap on 10 increases in property taxes. (NRS 361.4722, 361.4723, 361.4724) This resolution 11 proposes to amend the Nevada Constitution to provide that: (1) for the first fiscal 12 year after real property is sold or transferred, the real property is ineligible for any 13 adjustment to the value of improvements on the real property which is based on the 14 age of the improvement and certain partial abatements; and (2) for any fiscal year 15 thereafter, any adjustment to the value of improvements on the real property which 16 is based on the age of the improvements must be determined as if the improvements 17 were new improvements on the date of the sale or transfer. 18 This resolution also proposes to amend the Nevada Constitution to require the 19 Legislature to provide by law for a program to provide assistance to persons 20 – 2 – - *AJR1* domiciled in this State who are 62 years of age or older or persons with a disability 21 by paying such persons refunds of the property taxes imposed on the primary 22 residences of such persons. 23 RESOLVED BY THE ASSEMBLY AND SENATE OF THE STATE OF 1 NEVADA, JOINTLY, That Section 1 of Article 10 of the Nevada 2 Constitution be amended to read as follows: 3 Section 1. 1. The Legislature shall provide by law for 4 a uniform and equal rate of assessment and taxation, and shall 5 prescribe such regulations as shall secure a just valuation for 6 taxation of all property, real, personal and possessory, except 7 mines and mining claims, which shall be assessed and taxed 8 only as provided in Section 5 of this Article. 9 2. Shares of stock, bonds, mortgages, notes, bank 10 deposits, book accounts and credits, and securities and choses 11 in action of like character are deemed to represent interest in 12 property already assessed and taxed, either in Nevada or 13 elsewhere, and shall be exempt. 14 3. The Legislature may constitute agricultural and open- 15 space real property having a greater value for another use 16 than that for which it is being used, as a separate class for 17 taxation purposes and may provide a separate uniform plan 18 for appraisal and valuation of such property for assessment 19 purposes. If such plan is provided, the Legislature shall also 20 provide for retroactive assessment for a period of not less 21 than 7 years when agricultural and open-space real property is 22 converted to a higher use conforming to the use for which 23 other nearby property is used. 24 4. Personal property which is moving in interstate 25 commerce through or over the territory of the State of 26 Nevada, or which was consigned to a warehouse, public or 27 private, within the State of Nevada from outside the State of 28 Nevada for storage in transit to a final destination outside the 29 State of Nevada, whether specified when transportation 30 begins or afterward, shall be deemed to have acquired no 31 situs in Nevada for purposes of taxation and shall be exempt 32 from taxation. Such property shall not be deprived of such 33 exemption because while in the warehouse the property is 34 assembled, bound, joined, processed, disassembled, divided, 35 cut, broken in bulk, relabeled or repackaged. 36 5. The Legislature may exempt motor vehicles from the 37 provisions of the tax required by this Section, and in lieu 38 thereof, if such exemption is granted, shall provide for a 39 uniform and equal rate of assessment and taxation of motor 40 – 3 – - *AJR1* vehicles, which rate shall not exceed five cents on one dollar 1 of assessed valuation. 2 6. The Legislature shall provide by law for a progressive 3 reduction in the tax upon business inventories by 20 percent 4 in each year following the adoption of this provision, and 5 after the expiration of the 4th year such inventories are 6 exempt from taxation. The Legislature may exempt any other 7 personal property, including livestock. 8 7. No inheritance tax shall ever be levied. 9 8. The Legislature may exempt by law property used for 10 municipal, educational, literary, scientific or other charitable 11 purposes, or to encourage the conservation of energy or the 12 substitution of other sources for fossil sources of energy. 13 9. No income tax shall be levied upon the wages or 14 personal income of natural persons. Notwithstanding the 15 foregoing provision, and except as otherwise provided in 16 subsection 1 of this Section, taxes may be levied upon the 17 income or revenue of any business in whatever form it may 18 be conducted for profit in the State. 19 10. The Legislature may provide by law for an 20 abatement of the tax upon or an exemption of part of the 21 assessed value of a single-family residence occupied by the 22 owner to the extent necessary to avoid severe economic 23 hardship to the owner of the residence. 24 11. For purposes of assessment and taxation of 25 property: 26 (a) Except as otherwise provided in this paragraph, for 27 the first fiscal year after the sale or transfer of real property, 28 the real property sold or transferred shall not be eligible for 29 any adjustment provided by the Legislature by law based on 30 the age of improvements to the real property, any abatement 31 of the tax upon the real property provided by the Legislature 32 by law pursuant to subsection 8 or any abatement or 33 exemption provided by the Legislature by law pursuant to 34 subsection 10. The provisions of this paragraph do not apply 35 to real property for which the Legislature has provided by 36 law for an exemption of the tax on property. 37 (b) For any fiscal year following the first fiscal year 38 after the sale or transfer of real property to which the 39 provisions of paragraph (a) apply, any adjustment provided 40 by the Legislature by law based on the age of improvements 41 to the real property must be determined as if the 42 improvements were new improvements on the date of the 43 sale or transfer. 44 – 4 – - *AJR1* (c) The Legislature shall provide by law for definitions 1 of the terms “sale” and “transfer” as necessary to carry out 2 the provisions of this subsection. 3 12. The Legislature shall provide by law for a program 4 to provide for the payment of refunds of the taxes imposed 5 on the primary residence of a person domiciled in this State 6 who is 62 years of age or older or a person with a disability. 7 If such a person rents his or her primary residence, the 8 amount of the refund for which the person is eligible must 9 not exceed the portion of the rent which is deemed to 10 constitute accrued property tax. The Legislature shall 11 establish by law: 12 (a) The criteria which a person must satisfy to be 13 eligible for such a refund; and 14 (b) The amount of the refund to be paid to a person 15 eligible for such a refund, which may consist of a graduated 16 refund based on the household income of such a person. 17 And be it further 18 RESOLVED, That this resolution becomes effective upon 19 passage. 20 H