December 18, 2014
Las Vegas, NV – Nevada Attorney General
Catherine Cortez Masto announced today the impact of two court decisions
relating to the collections of use tax from power companies’ use of coal in
Nevada.
On Tuesday, Dec. 15 Carson City
District Judge James T. Russell ruled that Southern California Edison (SCE) was
not entitled to state refund on coal purchases from use taxes it paid to the
Nevada Department of Taxation for the period of March 1998 through December
2000. With added use tax and interest accrued over the last 12 years, the
refund would have been over $100 million. Russell’s decision followed an
eight-day bench trial in January. His decision was stayed pending a Nevada
Supreme Court ruling on a similar case involving Sierra Pacific and Nevada
Power Companies’ appeal of a Washoe District Court ruling.
The Nevada Supreme Court, on Dec. 4,
denied Sierra Pacific Power Company dba Nevada Energy’s claim for a refund of
$90 million.
Background
In 2002, Southern California Edison sought a refund of
$23,896,668.08 in use taxes it paid to the Nevada Department of Taxation for
coal consumption from March 1998 through December 2000. Southern
California Edison paid the use tax on its purchases of coal burned to generate
electricity at the Mohave Generating Station in Clark County, Nev. The Nevada
Department of Taxation first denied Southern California Edison’s refund request
in 2002. The Nevada Tax Commission approved the refund in a meeting that
was closed to the public. The Attorney General’s Office brought an action
to void the Tax Commission’s decision as the decision was made in violation of
the Open Meeting Law. SCE filed a Complaint in the First Judicial
District Court after being denied the refund in a subsequent Tax Commission
hearing.
NV Energy simultaneously sought a $25,932,735 tax refund for the
use taxes it paid on coal purchased between April 2002 and October 2006. NV
Energy appealed the Nevada Department of Taxation’s denial through a petition
for judicial review with Second Judicial District Judge Janet Berry. Berry
denied the request at which point NV Energy appealed to the Nevada Supreme
Court.
This case was prosecuted
by chief Deputy Attorney General Gina Session and Senior Deputy Attorney
General Andrea Nichols.
To read the First Judicial
District Court decision, click here.
To read the Nevada Supreme Court decision, click here.
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