‘Clerical error’ forces 151 Carson City residents to backpay thousands in property taxes
What is being called a clerical error is leading to 151 Carson City residents being forced to pay thousands of dollars in back property taxes.
According to Kimberly Adams from the Assessor’s Office, a new computer software system “bug” led to an overall tax reduction for individuals who installed solar panel improvements on their homes.
However, while solar panels are exempt from taxation per state law, the software system incorrectly took the exempted assessed value and deducted it from the overall assessed value of the property.
The Assessor’s Office sent a correction for the 2021-2022 and 2022-2023 fiscal years, for a combined total increase of $72,815.32 across the 151 parcels.
Carson City Supervisor Stacey Giomi stated that the city does not have a choice in the matter as to whether or not they can collect those back taxes.
“Legally, we don’t have a choice, correct?” Giomi asked. “If we wanted to say, ‘our mistake, we have to eat it,’ we can’t?”
Adams said she had combed through state laws and found that there is no way to have the city simply take the loss.
“If it were my personal business, absolutely,” Adams said. “But unfortunately the guidelines in NRS, I don’t see how we can.”
Several residents affected gave public comment.
One resident identified only by his first name, Rod, stated that while he is fine with his property taxes increasing due to an increase in property assessment, he does not agree with being charged over $1,200 in back taxes due to a mistake on the city’s part.
“I view myself as a customer of Carson City, and I don’t have any problem in receiving a tax assessment of my home because I added a solar system to it,” Rod said. “But I do have a problem with Carson City going back and trying to collect back taxes for a system error that was due to (the city) not doing due diligence, and holding me financially responsible for (their) mistake.”
Many of the residents who spoke, including Rod, are senior citizens who live on a fixed income. Many stated they do not have the extra funds to pay back taxes they did not budget for, and asked for the city to pay for the cost of their mistake.
One resident, Margaret Phillips, stated she did not become the property owner of her home until August 2022, and does not believe she should be held responsible for taxes on a property she did not own at the time.
Adams responded that the Assessor’s Office has received a few phone calls from new owners and unfortunately, the lien stays with the property.
“It is extremely unfortunate,” Adams said. “If there was any way I saw around this, believe me, we would have done it.”
“I don’t know what any of us on this board can say,” Mayor Lori Bagwell said. “We’re sorry, but we have to follow the law. It’s not a situation any of us have any control over.”
Adams said it would be “fantastic” if any amounts due could be paid by June 15, but that the city recognizes this is a financial burden on many.
“We are going to keep track of every single one of these properties and remove any penalties or interest accrued for this specific amount so we can work with the public," she said.
Resident Randi King told supervisors this could lead to homeowners losing their properties, especially those who survive on a fixed income.
“That is a major concern,” King said. “I think you’re going to open yourselves up to lawsuits from these title companies.”
Other residents suggested that the city should use their insurance to pay for their mistake.
Supervisor Giomi recommended the District Attorney’s office to determine if in fact they have to collect the taxes legally, and if so, he suggested allowing residents two years to make the additional payments since they are asking for two years worth of back taxes.
Supervisor Maurice White agreed with Giomi, and said that if the DA’s office determines they must collect the taxes, then the board should “reach into” unattached city funds and pay for the extra amount itself.
“This is our mistake and we ought to take responsibility for it,” White said.
“We have never paid the taxes for an error before,” Bagwell said. “There have been numerous tax errors that have been brought forward, and the individual has been required to pay. The tax was due. You owed the tax. And I 100% apologize that you erroneously received a tax reduction. This is to collect tax that you owed and should have paid. I want to be clear about that. It’s your tax — the property’s tax.”
“There’s a difference between a ‘onesie, twosie’ mistake due to input and a large mistake due to computer programming error,” White said. “There’s a difference.”
Deputy District Attorney Todd Reese said he would need more time to track down an answer as to whether or not the city could write off the loss or allow the city to pay.
This is a developing story. Check back for updates.