Bill would combine rental-property entities for commerce-tax reporting; sponsor cites hedge-fund ownership of thousands of houses

Assemblymember Venetia Constant (vice chair) presented Assembly Bill 457 to the Assembly Committee on Revenue, proposing that businesses primarily engaged in renting real property be treated as a combined taxpayer group for commerce-tax purposes if they are controlled at 50% or greater by a parent or controlling interest.

Sponsor arguments: Constant said institutional investors, private-equity firms and hedge funds have acquired thousands of single-family homes in Nevada and that AB 457 would aggregate separately formed single-property LLCs under a common controlling owner for commerce-tax calculation. She described the policy as aimed at ensuring large, institutional owners that meet commerce-tax thresholds pay taxes comparable to other businesses and to improve transparency about who ultimately owns rental homes. In her remarks she referenced published reporting that a Homes-for-Rent management company owns at least 3,190 homes in Clark County and that a hedge fund cited in the reporting has more than $55 billion in assets; she also cited that roughly one in two residents in Clark and Washoe counties are renters.

Key provisions discussed: The bill defines a combined taxpayer group when a controlling interest (more than 50%) exists among entities that own rental real property and aggregates their Nevada gross revenue for commerce-tax determination. The sponsor and staff noted the bill does not itself set a revenue appropriation; rather it changes how the commerce tax base would be determined for qualifying owners.

Administration, tracking, and data questions: Committee members and fiscal staff asked how the State would identify controlling owners and calculate revenue for the combined group. Michael Nakamoto of the Fiscal Analysis Division said estimating revenue for such an aggregation would be difficult without new transparency—identifying owners and tying their rental revenues together would require outreach to many landlords or new reporting mechanisms. The sponsor and staff acknowledged additional transparency or registration mechanisms may be necessary to implement the concept.

Public testimony: Supporters included Andrew Clarke of New Day Nevada and Kent Ervin of the Nevada Faculty Alliance, who argued the bill would close a tax loophole, promote revenue fairness and potentially increase funds available for public purposes. Neutral testimony came from Becky Dutra of the Nevada Taxpayers Association, which said tax policy should be simple and not single out one industry and asked the committee to consider administration and potential ambiguities. The Las Vegas Chamber and the commercial real-estate trade association provided neutral testimony and asked for follow-up analysis to avoid unintended consequences on commercial leasing.

Next steps: The committee closed the hearing without recording a committee vote during the transcript. Committee members asked the sponsor and fiscal staff to investigate implementation mechanics, including registration or reporting options to identify controlling owners.

Ending: AB 457 remains before the committee for further drafting and potential amendments; staff and the sponsor signaled follow-up work to clarify how owners would be identified and revenues aggregated.