Las Vegas Sun

November 25, 2017

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Nevada Supreme Court decisions could have statewide implications for HOAs, cost Caesars $850,000

Homeowners associations in Clark County are waiting anxiously for a decision from the Nevada Supreme Court on the tax value of certain buildings in the Sun City Summerlin Community Association.

The court heard arguments Tuesday on the appeal of the Clark County Assessor’s Office, which placed a $19.5 million value on four recreational clubhouses and a golf maintenance facility. But the state Board of Equalization reduced the value to $2,500.

Paul Johnson, attorney for the Assessor’s Office, told the court that its decision would have “broad” application. Outside the courtroom, Johnson said 15-20 homeowners associations have filed appeals on the same subject.

James Susa, representing the 7,800-home Sun City, urged the court to uphold the decision of the Board of Equalization on grounds that these buildings could not be used for commercial purposes. He argued that the law allows the property owner to appeal the valuation to the courts but that the law does not give that appeal right to the assessor.

Susa argued that a “nominal” value should be placed on these buildings, which are not open to the public, and said the Board of Equalization found there was “substantial evidence” to back up the finding.

Chief Justice Kristina Pickering told Susa there was nothing in the law to define “nominal” value.

Johnson called the decision by the board “outrageous” and said the value should be determined by cost, less depreciation. He said that even though there is a restriction on selling the five structures, they still have value. Outside the courtroom, Johnson estimated the county would lose $200,000 in tax revenue if Sun City wins the case.

Justice Michael Douglas said the board seemed to pull the $2,500 value “out of the air.”

The decision by the court, which took the case under submission, could impact the other homeowners associations, not only in Clark County but in Northern Nevada.

Clark County District Judge Joanna Kishner ruled in favor of Sun City, finding that the restrictions and the zoning laws affect the property value, in a case focusing on the 2010-2011 valuations.


In a separate case before the Nevada Supreme Court on Tuesday, an attorney for Caesars Palace said the Nevada Gaming Commission exceeded its authority in ordering the Las Vegas casino to pay $797,790 in entertainment taxes on shows at its Colosseum.

Mark Ferrario told the court that the gaming commission wrongly interpreted the law in arriving at the tax payment.

But Senior Deputy Attorney General Edward Magaw said the Legislature wanted “to tax as much as possible” in the live entertainment levy, and Caesars is not exempt from the tax.

Caesars has an agreement with AEG Live to operate the Colosseum. AEG, in turn, has a contract with Ticketmaster to sell tickets for events at the venue over the phone and on the Internet. Ticketmaster pays AEG for the right to sell the tickets and gave royalties to AEG.

Caesars paid the tax on the tickets sold, but the Gaming Commission determined the royalties were taxable and that Caesars owes $354,821 for 2004-2006 and $490,760 for 2006-2008.

Caesars appealed, but District Judge Jerry Wiese ruled in favor of the Gaming Commission.

Magaw argued the royalty payment was included in the ticket charge to customers, and Ferrario said the royalties were nontaxable since the money went to AEG and not to the resort.

The court took the arguments under submission and will rule later.

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