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Senate Bill 196 would allow heavy‑equipment rental firms to add a disclosed recovery fee to offset tangible property tax
Summary
Senate Bill 196 would permit certain heavy‑equipment rental companies to add a disclosed recovery fee of up to 2% on customer invoices to offset the companies’ tangible personal property tax assessed on July 1 each year; participation would be voluntary and restricted to defined NAICS categories.
Senate Bill 196, presented by Senate Majority Leader Nicole Cannizzaro, would authorize certain heavy‑equipment rental companies to charge a recovery fee of up to 2% on rental revenues to offset the year’s tangible personal property tax liability. Cannizzaro and a consulting analyst said the measure is voluntary, narrowly targeted, and intended to create a transparent, auditable mechanism that many other states already allow.
"Nevada assesses a full year of tangible personal property tax on any piece of heavy equipment that is in the state on July 1 of a given year," Senate Majority Leader Nicole Cannizzaro told the committee. "The vast majority of other states have moved to various forms of taxation or fees that are less onerous on businesses."
Brian Gordon, principal at Applied Analysis, said the bill would apply only to companies in specific North American Industry Classification System (NAICS) categories that predominantly rent heavy equipment on a short‑term basis. He said participation is optional and the statute would require rental companies that charge the recovery fee to hold the funds in a separate account and use them only to offset their personal property tax liabilities; the Nevada Department of Taxation could audit compliance.
"This is permissive. It is not mandated," Gordon said. "Government agencies would not incur any of the recovery fees."
Industry trade groups and rental companies supported the bill. Representatives of the American Rental Association, United Rentals, and the American Rental Association’s members cited Nevada’s trade shows and the importance of keeping equipment in state. The Vegas Chamber said the bill is business‑friendly and expressed support. The Nevada Assessors Association testified neutral; Story County assessor Jana Seddon said assessors’ only question was why the language appears in the particular NRS chapter selected but otherwise raised no substantive objection.
Proponents said the recovery fee aims to reduce the incentive for operators to move equipment across state lines simply to avoid a July 1 tax assessment and to bring Nevada in line with roughly nine other states that allow similar mechanisms. Cannizzaro said the fee would be transparent to customers and subject to reporting and audit so that funds cannot be diverted to other corporate purposes.
No formal committee vote was recorded at the hearing; the bill drew supportive testimony from rental industry groups and neutral testimony from assessors. Committee members asked technical questions about account interest and timing of payments; witnesses said assessors’ normal July 1 assessment cycle would not change and the recovery fee would simply provide a means for rental companies to recover the tax they pay.
Votes at this hearing: none recorded.
