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EDITORIAL: State still poised to benefit from illegal tax hikes

Governments are highly efficient at separating taxpayers from their hard-earned money, but when it comes to reimbursing them for excessive tax payments … not so much.

Last year, it took the IRS eons to process paper returns, forcing some taxpayers to wait six months or more to receive their refunds. Meanwhile, the Treasury’s withholding requirements ensure a constant stream of revenue from wage earners.

The state of Nevada is no different. The DMV, for example, is quite capable of collecting some of the highest car registration fees in the nation. Yet ask the DMV to return money to drivers who were improperly charged certain fees, and the complications pile up end on end.

The rebates in question stem from a scheme launched by legislative Democrats in 2019 to soak state taxpayers for more than $100 million. Lacking the votes to reach the two-thirds majority required to pass tax hikes, they decreed that killing the sunset provisions on a DMV technology fee and a payroll tax didn’t amount to a tax increase and could be achieved through a simple majority vote.

Their arguments were patently absurd — the whole point of the exercise was to increase the amount of money pouring into state coffers — and the Nevada Supreme Court unanimously ruled in 2021 against the Democratic leadership. That decision affirmed a District Court judge’s previous ruling that the tax hikes were illegal and that those who had paid the assessments “are entitled to an immediate refund thereof with interest at the legal rate of interest from the date collected.”

By the time of the court decision, the state had realized nearly $6 million in improperly collected DMV fees. Lawmakers during the last legislative session struggled with how to refund the money, which amounts to only a few bucks per driver. Not surprisingly, the solution didn’t involve sending out small checks to those who had paid the fee. Rather the onus was placed on individual motorists to demand the refund.

It’s no surprise, then, that the DMV announced it has rebated only $1.9 million out the $6 million it owes. Businesses and fleet owners have been more proactive and received $1.6 million of the $2.2 million they are due. Individual drivers have collected just $242,000 of the $3.8 million set aside for them.

Any money not claimed by June 30 will go to the state highway fund.

A DMV spokesman said that the agency has dedicated windows to serving motorists seeking to collect the rebates and that no appointment is necessary. To determine refund eligibility email DMVTechFeeSupport@dmv.nv.gov or call 775 684-4611. The amount may be small, but there is a principle involved. The more money the state gets to keep, the more legislative Democrats will be rewarded for their cynical chicanery.

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