CHAPTER 361 - PROPERTY TAX

NAC 361.236 “Book value,” “net book” defined. (NRS 360.090, 361.320) “Book value” or “net book” means the cost of a property as carried in the accounting records of the owner less the accrued depreciation reserve for that property. [Tax Comm’n, Property Tax Reg. part No. 15, eff.…

NAC 361.238 “Capital structure” defined. (NRS 360.090, 361.320) “Capital structure” means the manner in which an organization is financed, that is, the amount and kind of equity and debt that satisfies the need for money. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.240 “Capitalization process” defined. (NRS 360.090, 361.320) “Capitalization process” means the conversion of a stream of income having a certain duration into value by means of a capitalization rate that recognizes the degree of risk as between the property and the incom…

NAC 361.242 “Capitalization rate” defined. (NRS 360.090, 361.320) “Capitalization rate” means a factor, used as a divisor, which converts an income stream into an indicated value. If the income stream is expected to be of limited duration, a recapture component may be included in…

NAC 361.244 “Cash accounting” defined. (NRS 360.090, 361.320) “Cash accounting” means recording revenues actually received and expenses actually paid during the report period. See NAC 361.206 for contra. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.246 “Cash equivalent” defined. (NRS 360.090, 361.320) “Cash equivalent” means the market value of a property expressed in terms of cash. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.248 “Cash flow,” “net cash flow” or “after-tax cash flow” defined. (NRS 360.090, 361.320) “Cash flow,” “net cash flow” or “after-tax cash flow” means the sum of depreciation (and depletion, if any) and net income after all expenses, all taxes and interest on debt. Convers…

NAC 361.250 “Cash flow, before-tax” defined. (NRS 360.090, 361.320) “Cash flow, before-tax” means the cash flow plus income taxes. When applied to “cash flow,” the term “before-tax” refers only to income taxes. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.252 “Certificate of convenience and necessity” defined. (NRS 360.090, 361.320) “Certificate of convenience and necessity” means a grant of authority from a state or federal regulatory commission authorizing a company to render a public utility service, usually specifying …

NAC 361.254 “Common carrier” defined. (NRS 360.090, 361.320) “Common carrier” means a person, corporation or entity engaged in transporting persons, goods or messages for compensation over a regular route, on a certain schedule or at a published rate, all of which are subject usu…

NAC 361.256 “Compound interest and annuity tables” defined. (NRS 360.090, 361.320) “Compound interest and annuity tables” means the six sets of factors or coefficients that embrace the fundamentals of the mathematics of finance. The various factors are here called present worth o…

NAC 361.258 “Construction work in progress” defined. (NRS 360.090, 361.320) “Construction work in progress” means the total of the balances of work orders for plant, road and equipment including expenditures on research, development and demonstration projects for construction of …

NAC 361.260 “Contribution in aid of construction” defined. (NRS 360.090, 361.320) “Contribution in aid of construction” means a plant which has been contributed to a utility by a prospective customer or which has been constructed by the utility and paid for by the prospective cus…

NAC 361.262 “Debt” defined. (NRS 360.090, 361.320) “Debt” is money owed. In the usual case, borrowed money (debt) is considered to be a permanent part of the capital used in the business. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.264 “Deferred federal income taxes” defined. (NRS 360.090, 361.320) “Deferred federal income taxes” means the estimated income tax on the excess of net revenues, recognized for accounting purposes, over that reported for tax purposes. [Tax Comm’n, Property Tax Reg. part N…

NAC 361.266 “Depreciation” defined. (NRS 360.090, 361.320) “Depreciation,” in an appraisal sense, means the loss in value of an item due to all causes. Sometimes it is meant to be physical deterioration, but in a strict sense it would include functional and economic obsolescence.…

NAC 361.268 “Discount rate” defined. (NRS 360.090, 361.320) “Discount rate” means the annual percentage rate used to select present worth factors. The discount rate is one form of capitalization rate. A discount rate can be derived in two ways: 1. By use of the band-of-investment…

NAC 361.270 “Earnings-price ratio” defined. (NRS 360.090, 361.320) “Earnings-price ratio” means the ratio of earnings per share available to common stockholders of a specific company for an accounting period to the market price per share of the common stock of that company. See N…

NAC 361.272 “Economic life” defined. (NRS 360.090, 361.320) “Economic life” means the useful life of a property in contrast to its physical life which could be greater. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.274 “Economic rent” defined. (NRS 360.090, 361.320) “Economic rent” means the rent currently and typically found in the open market. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.276 “Effective rate of interest” defined. (NRS 360.090, 361.320) “Effective rate of interest” means the total cost to a company for borrowing money divided by the face value of the money. The interest expense plus the cost of floating the debt or compensatory bank balance…

NAC 361.278 “Equity” defined. (NRS 360.090, 361.320) “Equity” means the owners’ interest in the business. In monetary terms, it is the amount of money the owners have invested in common and preferred stock plus earnings of the business that have not been paid out as dividends. [T…

NAC 361.280 “Expense” defined. (NRS 360.090, 361.320) “Expense” means the gross number of dollars paid for materials or services. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.282 “Fair market value” defined. (NRS 360.090, 361.320) “Fair market value” means the highest price estimated in terms of money which a property will bring if exposed for sale in the open market allowing a reasonable time to find a purchaser who buys with full knowledge o…

NAC 361.284 “Fair return” defined. (NRS 360.090, 361.320) “Fair return” means an amount of income authorized by a regulatory agency which is considered sufficient for a utility to attract necessary additional capital while at the same time rendering adequate service. [Tax Comm’n,…

NAC 361.285 “Final reconciliation” defined. (NRS 360.090, 361.320) “Final reconciliation” means the application of the process of evaluating alternative conclusions and selecting from the indications of value derived from each of the approaches used in the appraisal process to ar…

NAC 361.286 “Fixed expenses” defined. (NRS 360.090, 361.320) “Fixed expenses” means those expenses of a business enterprise which do not vary in relation to changes in volume of output such as interest on borrowed funds, insurance or general overhead expenses. [Tax Comm’n, Proper…

NAC 361.288 “Flow-through accounting” defined. (NRS 360.090, 361.320) “Flow-through accounting” means the practice of charging to the current period only those expenses incurred during the period. A common example is the lesser income tax expense in a given period, due to the use…

NAC 361.290 “Form P report” defined. (NRS 360.090, 361.320) “Form P report” means the annual report of an operation filed by a common carrier pipeline with the Surface Transportation Board. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.292 “Form 2 report” defined. (NRS 360.090, 361.320) “Form 2 report” means the annual report of an operation filed by an interstate natural gas and electric transmission company with the Federal Power Commission. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.294 “Form 10-K report” defined. (NRS 360.090, 361.320) “Form 10-K report” means an annual report to the Securities and Exchange Commission in Washington, D.C., concerning corporate operations. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]—(NAC A 9-30-88)

NAC 361.296 “Forms R-1 and R-2” defined. (NRS 360.090, 361.320) “Forms R-1 and R-2” means the annual reports of business operation filed with the Surface Transportation Board by Class I railroads (operating revenues of $5,000,000 or more) and Class II railroads (operating revenue…

NAC 361.298 “Fractional appraisal” defined. (NRS 360.090, 361.320) “Fractional appraisal” means the valuation of one or more component parts without reference to the value of the whole enterprise. The sum of two or more fractional appraisals is called a summation appraisal and do…

NAC 361.300 “Full cash value” defined. (NRS 360.090, 361.320) “Full cash value” means the amount at which the property would be appraised if taken in payment of a just debt due from a solvent debtor. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.302 “Functional depreciation” defined. (NRS 360.090, 361.320) “Functional depreciation” means the loss of service usefulness or obsolescence due to technological advances or social requirements. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.304 “Generally accepted accounting principles” defined. (NRS 360.090, 361.320) “Generally accepted accounting principles” means those procedures adopted and endorsed by the financial accounting standards board to which auditors certify when filing an audit report. [Tax Co…

NAC 361.306 “Gross addition” defined. (NRS 360.090, 361.320) “Gross addition” means new property added to an existing plant or an improvement in the form of a betterment added to existing property and is usually reported in a dollar amount. [Tax Comm’n, Property Tax Reg. part No.…

NAC 361.308 “Gross income” defined; synonymous with “gross earnings.” (NRS 360.090, 361.320) “Gross income” means the total amount of income received by a natural person before any deductions are taken. The term is synonymous with the term “gross earnings.” [Tax Comm’n, Property …

NAC 361.310 “Historical cost” defined; synonymous with “original cost.” (NRS 360.090, 361.320) “Historical cost” means the first cost of a property item of a public utility regardless of the present owner or interim sales transactions. It usually refers, in the accounting of publ…

NAC 361.312 “Imbedded debt cost” defined. (NRS 360.090, 361.320) “Imbedded debt cost” means the average rate of interest that a company pays for its long-term debt. Basically, it is the amount of the total interest paid on long-term debt during the year divided by the face value …

NAC 361.314 “Inch equivalent” defined. (NRS 360.090, 361.320) “Inch equivalent” means the miles of various sizes of a pipeline converted into an equivalent mileage of 1-inch pipeline. For example, 1 mile of 36-inch pipe is equivalent to 36 miles of 1-inch pipe. [Tax Comm’n, Prope…

NAC 361.316 “Income” defined. (NRS 360.090, 361.320) “Income” means money or other benefits stemming from the ownership of property, generally received on a regular monthly or annual basis. The word “income” used alone has no specific appraisal significance, but must be modified …

NAC 361.318 “Income approach to value” defined. (NRS 360.090, 361.320) “Income approach to value” means the method of appraisement that involves the analysis of the incomes and expenses of income-producing properties and the use of the capitalization of income to produce property…

NAC 361.320 “Indicator of value” defined. (NRS 360.090, 361.320) “Indicator of value” means a conclusion of the worth, expressed in dollars, of a specifically identified item of property (be it a single parcel of land or piece of equipment or an extensive corporate conglomerate) …

NAC 361.322 “Interest rate” defined. (NRS 360.090, 361.320) “Interest rate” means a promised, typically contractual annual percentage rate of interest paid on a debt such as a mortgage note or a contract. Interest is the cost of borrowing money. [Tax Comm’n, Property Tax Reg. par…

NAC 361.324 “Interperiod allocation” defined. (NRS 360.090, 361.320) “Interperiod allocation” means an assignment of expenses to a certain period rather than to the period in which the expenses occurred. Income tax expense is so handled in normalization accounting. [Tax Comm’n, P…

NAC 361.326 “Investment tax credit” defined. (NRS 360.090, 361.320) “Investment tax credit” means a federal income tax incentive intended to encourage capital investment. It is a permanent forgiveness of income tax liability through the direct reduction of tax liability for the y…