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Arnold M. Knightly

Taxation: Birdie in the hand

4 June 2007

LAS VEGAS, Nevada -- Las Vegas promotes itself as a worldwide luxury destination with its wide variety of golf courses designed by the likes of Arnold Palmer, Jack Nicklaus and Tom Fazio. Tax records suggest big names weren't the only thing working for golf courses last year.

Thanks to an obscure abatement promoted by golf course lobbyists during the 2005 Legislature, Southern Nevada golf course owners received tax breaks worth $4.4 million in 2006.

The new valuation reduced tax bills for gaming companies, municipalities and private owners of the area's 54 golf courses. The reductions ranged from $3,868 at the city of North Las Vegas Golf Course to $229,527 for Red Rock Country Club west of the Las Vegas Beltway off of Sahara Avenue, according to the Clark County assessor's office.

The average reduction was $81,164 with 15 courses receiving at least $100,000.

The tax money the assessor collects is spread among county entities with about 35 percent set aside for the school district.

"With this newfound savings they have received, have any of them reduced their rack rates to the public?" Clark County Assessor Mark Schofield said.

Stan Spraul, president of the Nevada Golf Course Owners Association and general manager of Southern Highlands Golf Club, said the owners are using the money on course improvements, new hirings or other operational costs.

The new tax statute follows years of battles between local golf course owners and the Clark County assessor's office over the method used to value golf courses for tax purposes.

The tax-code change was a late addition by golf course lobbyists to the state assessor's bill during the 2005 Legislature. Spraul said the request came after a series of appeals by Southern Nevada golf course owners claiming the Clark County assessor's office was overvaluing the land.

"We would have to appeal every year (to the County Board of Equalization) and get relief and the next year the property tax bill would be right back where it was," Spraul said. "We were trying to standardize across the state what courses were paying so we could avoid the expense of having to go to appeal."

In the past three years, assessor's records show, golf courses appealed 57 tax bills; 36 were reduced.

Spraul said the problem was mostly confined to Southern Nevada.

The abatement designated courses as open space with a set per acre value before adjusting for building improvements, excess land and obsolescence. Senate Bill 394 was signed into law by then Gov. Kenny Guinn in June 2005.

The new statute then went to the Nevada Department of Taxation, which sent it to the Nevada Tax Commission for a series of workshops in 2005 and 2006 to clarify the language.

During the workshops, golf course owners' representatives and the Clark County assessor's office disputed points ranging from basic land value to how to adjust value for improvements.

Schofield said that although the new code may have standardized the treatment of the golf courses, it could also be seen as a partial tax exemption not given to other income-producing properties.

He said the addition to the 2005 bill caught the state's assessors by surprise.

"We didn't have the influence to persuade the legislators to pull that particular language out," Schofield said. "Incorporated into our bill was other language that was very important to us. We were very concerned about having the bill killed altogether."

Opponents of the tax-assessment reduction, including state Sen. Terry Care, D-Las Vegas, described the tax law as special-interest legislation. Care said he opposed the measure when it was introduced and planned to introduce new legislation this session to repeal the abatement.

But he said he met a series of unexpected hurdles. He was told that the proposed measure would be viewed as a tax increase, not a repeal, requiring a two-thirds votes from both state houses before going to the governor's desk.

"I was flat-out told that if the bill were able to get through both houses, the governor was going to veto it," Care said. "I never introduced the bill because it was quite apparent it wasn't going to meet with success."


Golf course Previous taxable value Revised taxable value Precent reduction

Tax savings

Bali Hai (Walters Golf) $24.1 million $7.3 million 69.7 $167,306

Cascata (Harrah's Entertainment) $32.0 million $13.3 million 58.4 $186,917

Red Rock Country Club (private) $37.8 million $14.9 million 60.6 $229,527

Rio Secco (Harrah's Entertainment) $19.6 million $10.2 million 48.0 $93,416

Shadow Creek (MGM Mirage) $21.4 million $11.5 million 46.3 $98,855

Wynn (Wynn Resorts Ltd.) $22.3 million $5.3 million 76.2 $170,499

Source: Clark County assessor's office