Nevada Supreme Court to Rule on Tax Lawsuit Filed by Fernley Against the State

Listen to the story

Nevada Supreme Court to Rule on Tax Lawsuit Filed by Fernley Against the State


Flickr/Kevin Standlee

A legal dispute between the city of Fernley and the Nevada Department of Taxation is on hold as the Nevada Supreme Court decides whether or not the city has a right to file a lawsuit about the issue. KUNR's Kate McGee explains...

Fernley officials say the city should receive more money from the annual consolidated tax distribution system, also know as the C-tax.

It's composed of sales, government services, liquor, cigarette and real property transfer taxes and divided by the state based on a complicated formula.

The state then distributes the money to municipalities based on population and budget.

The problem for Fernley, which is located in Lyon County, is that in 2001 it changed from a town to a city, when its population nearly tripled.

But it's still receiving the same amount of money it did when it was a town, $122,000 a year.

Fernley Mayor LeRoy Goodman says the city should receive between $6 and 7 million dollars annually.

He says many services suffer because of the lack of funds

"Streets and roads are one of the big things. Sidewalks, curbs, gutters, storm drains that's probbaly our biggest problem.The level of service to our parks. We dont have the staff to maintain them, nor do we have the money to maintain them," Goodman said.

Before Fernley could possibly see any increase in money, the Nevada Supreme Court must rule if the city has the right to file the lawsuit against the state in the first place.

State lawyers argue Fernley doesn't have the authority. They also say the city should have appealed for more money back in 2001, and its missed its chance.

The Nevada Department of Taxation did not return calls for comment.

In December, the Lyon County Commission voted to support a bill draft request in the upcoming legislative session to study how the Consolidated Tax is distributed.