Nevada tax regulators approve $26.6 million refund to AT&T

In a unanimous vote Tuesday, the Nevada Tax Commission approved telecom giant AT&T's request for a $26.6 million sales and use tax refund.

The Nevada Department of Taxation spent more than a year on an audit of AT&T's tax filings and ultimately decided the company was due the money after it mistakenly remitted use tax on retail inventory held in its Reno warehouse but sold out of state between Oct. 2013 and Dec. 2014. Nevada law allows companies to hold inventory for out-of-state sale without paying taxes on it.

"I've gone through their spreadsheets...and verified all of this was reported to the tax department in error and should be refunded to the taxpayer," said Samantha Turner, the tax department auditor who reviewed AT&T's request.

Before calling for a vote on the refund, Tax Commission Chairman Jim DeVolld said he had been inundated with emails from Nevadans who complained to him that the company refuses to refund billing errors that are more than six months old.

"It sounds like the state of Nevada, everyone agrees, we owe you this money from four years ago," DeVolld said. "What's the policy of AT&T in refunding dollars to your clients?"

The two accountants representing AT&T at the hearing said they could only speak on the topic of AT&T's sales and use tax and didn't know the company's refund policy. DeVolld, however, continued to press.

"I'm a representative of the people of the state of Nevada and if you owe somebody money, you probably should try to give it back to them irregardless of the time frame," he said.

Tax Commissioner Randy Brown, appointed to the commission in November by Gov. Brian Sandoval, abstained from the vote. Brown has worked for AT&T for more than 20 years as a lobbyist and current director of regulatory affairs.

The refund will have a direct impact on the budgets of local governments throughout Northern Nevada, which will receive about $11 million less tax revenue because of the refund. The state of Nevada will take about a $16 million hit.

Washoe County Assistant Manager Christine Vuletich said county government will receive nearly $5 million less in tax revenue. She is hoping the state tax department spreads the refund out over three years, which would reduce the impact on any one budget cycle.

"We have asked the state for a three-year payback period," she said. "Really, the major impact to us is to our cash flow."

The city of Reno is expected to receive $2.7 million less in tax revenue as a result of the refund.