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StumblePublished Friday, June 27, 2008 | 11:14 a.m.
Updated Tuesday, Oct. 28, 2008 | 10:15 a.m.
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- June 27 -- Gaming industry opposes tax provision
CARSON CITY – Gov. Jim Gibbons wants to close a $150 million loophole that has allowed casinos and others to escape paying sales and use tax on complimentary meals.
And the special session of the Legislature is ready to approve a bill to reinstate the tax on free meals for high rollers and for employees of casinos and other restaurants.
The Nevada Supreme Court ruled earlier this year that the sales and use tax could not be imposed on free or reduced meals. And so far the state Tax Department has requests for refunds of $150 million.
The revenue is lost both to the state and local governments.
Clark County Commission Chairman Rory Reid called it an important thing to do. He said governments need to plan their economic future and this court decision caught them by surprise. He said the loophole created by the Supreme Court needs to be closed.
Bill Bible, head of the Nevada Resort Association, said the issue “is under review” since the big casinos would start paying the sales tax on the comp meals. He said he has not had a chance to look at the proposal by Gibbons.
Assembly Majority Leader John Oceguera, D-Las Vegas, said a bill has already been drawn to overturn the Supreme Court’s decision. And Assemblywoman Sheila Leslie, D-Reno, and Sen. Dina Titus, D-Las Vegas, both indicated there was support for the plan.
Leslie said the Legislature is going to “clarify” the law. Titus said generally lawmakers agree to eliminate this tax break for the gaming industry and restaurants.
Gibbons said the Supreme Court decision has put the “state in a very tenuous position” and “I want them (the Legislature) to close that loop so that we don’t get ourselves in a further problem dealing with it down the road.”
To permit this to continue could result in “an enormous problem for the state of Nevada,” Gibbons said.
The Legislature opened its special session at 10 a.m. today.
oooooo....."Rory Reid says.." Now that really give the proposal some weight.
But watch Adelson yank the gubber's puppet strings on this one.
Why should anyone have to pay SALES TAX on something they are giving away.
Most look at this just being a casino issue but it applies to every business if you follow the letter of the law. You give something away, the state wants you to pay sales tax on it.
There should not be a sales tax on free items no matter what the business is. Business gives employees free food and the state requires them to pay sales tax. I guess if they stopped giving the food away they can save on sales tax. Who has this helped?
VegasLee: When you go to the store and pay sales tax on your purchases, do they ask you what you are going to do with the item? no, they do not. you pay the tax and then you do whatever you want with it. Use it, give it away, give it to charity. So when the casinos buy things, what does it matter what they are using it for? does it benefot their business? Are they deducting it from their federal returns as a business expense to promote their business? How do you know how much they gave away and how much they used? You pay your tax and the casinos should pay theirs. Comps are a choice. They are a cost of doing business. No one is forcing the casinos to comp.
I wish that all the people like (areyouserious) who just want to tax everything would just go back to the state that they came from. You are the reason why we have a shortfall as you require more and more services. But given the opportunity I bet that you have used a comp or two in your time.
Hey Guys, dont anyone know that the Food is already taxed the minute you buy it from the vendor. So after you cook your taxed food and serve it, it's taxed again, WHAT A COUNTRY
All the states know now is TAX, TAX, TAX.
Also good excuse, it's for the kids, schools
police, fireman, EMS, any excuse to make people feel sorry, what they are really trying to tell you is. THEY OVERSPENT AND EXPECT YOU TO MAKE UP THE MONEY THEY SPENT, BUT DID'T HAVE
The casinos are already our tax cow. They too are struggling in the current economy. Comp food is a "compensation" for money wagered and lost by customers in the machines and on the tables, money which is already subject to a stiff tax (6% or so). The comps are effective advertising and make people comfortable with returning.The comps are just a tiny percentage of the money spent by customers. Add sales tax and customers will be less likely to return. The tax revenue generated would be largely offset by reduced gaming revenues and taxes thereon. We might as well force casinos to pay sales tax on their advertising used to attract customers, another lose-lose situation. Nevada is a great state for the citizen, let us not kill the cash cow.
The comps will forever be gone after this passes. Now what will bring people here? We are just a giant shopping mall built on the Sun.