Storey County officials say their county is losing millions of dollars in tax revenues because of a difference of opinion over ZIP codes.
"It could be $12 million to date," says Pat Whitten, director of administration and budgets for Storey County."It's crucial to determine how much is involved and where those funds ought to be going."
Storey County Commissioner Bob Kershaw says he lacks hard numbers, but estimates that in the last 10 years the county could have lost $10 million.
The taxes are generated, for the most part, by sales of construction equipment and building materials used at the Reno-Tahoe Industrial Center near Patrick, the world's largest industrial park.
"If you were to move into the Tahoe-Reno Industrial Center, you'd have a Sparks ZIP code," says Kershaw."If you take a delivery and your ZIP code says Sparks,Washoe County gets the tax money."
Storey County cities Virginia City and Gold Hill use Storey County ZIP codes, while Lockwood, Rainbow Bend, Painted Rock and Patrick all use Sparks ZIP codes.
"We want to seek clarifications on other solutions," says Whitten."What's needed is to maintain an accurate accounting of tax revenues, to iron out where the true sale takes place."
The key point, he says, is whether use tax is credited at point of origination or at point of delivery.
Chuck Chinnock, executive director of the Nevada State Department of Taxation, says the question depends on how state law is interpreted.
"They've been arguing this for four years," says Chinnock.
State law says the use tax is levied on the "storage, use or consumption" of goods.
That is generally interpreted as wherever goods are first stored, used or possessed.
For instance, if a contractor based in Reno takes possession of a shipment in Washoe County, then trucks the materials to the building site in Storey County,Washoe County would be the first point of possession.
"Storey County has been brainstorming to make sure the tax money we deserve stays in Storey County," says Kershaw."The talking between Storey County and the Nevada Department of Taxation has been going on heavy for years."
His county wants to collect taxes on materials and equipment used at Storey County locations, no matter where they are first delivered.
The issue has heated because while only a small part of the Reno-Tahoe Industrial Center has been developed, a Wal-Mart distribution center site is currently under construction and another 27 properties are in escrow.
"This is why we want to straighten it out now," says Kershaw.
Changes in ZIP codes require action by the U.S.
Postal Service.
The next step toward that end would be a meeting with U.S.
Sen.Harry Reid, says Kershaw.
Barrick Gold, Kershaw noted, is building a power plant in Storey County, and deliberately used a Virginia City ZIP code so Storey County would get the taxes.
Storey County's option, says Chinnock, is to appeal to the Nevada Tax Commission, an eight-member board with the authority to write administrative statutes.
"Perhaps money from the Reno-Tahoe Industrial Park is not coming in as fast as they'd like," Chinnock says.
However, at present the point is moot because Storey is among 10 Nevada counties that get guaranteed revenue from the state because they don't generate much sales tax themselves; it would have to double sales taxes from its current $45 million to escape that situation.
Storey County has retained attorney Norman J.Azevedo to represent it before the Nevada Tax Commission.
