Wednesday, April 15, 1998 | 10:27 a.m.
Three prominent Strip casinos Tuesday gave nearly 1,000 maids, doormen, dealers and food and drink servers time off work to loudly protest an Internal Revenue Service plan to tax the free meals casinos have been giving their employees since the 1970s.
While the IRS plan will hit the employees with new withholding taxes, casinos will no longer be allowed to deduct the free meals from their taxes, and may face millions of dollars in back taxes for years of deductions.
Recognizing that it's easier to build a case for unfairness around low-paid workers who are facing higher taxes than around flush casinos that are losing a deduction, the MGM Grand, the Tropicana and New York-New York provided protesters and kicked in some serious logistical support for Tuesday's rally.
The casinos provided highly visible protest space, brown-bag lunches, a public address system, and the use of several large screens to simulcast speeches made in front of the MGM to the other casinos.
The rally focused exclusively on the service employees who could find themselves paying an extra dollar in taxes for each free lunch as early as July 1.
"I think the IRS should have something better to do than pick on working men and women who are just trying to support their families," said Martha Turrin, a pantry worker at the MGM, to rousing applause.
Little was said publicly about the casinos themselves.
The tax changes stem from a Sept. 30 ruling by U.S. Tax Court in a case involving Boyd Gaming Corp. The court ruled that free meals were essentially income, and should be taxed as such. The ruling ended the deduction casinos had long claimed for the free meals.
The IRS has not yet decided when it will begin requiring companies to withhold additional employee income taxes to cover the free lunches, or whether it will seek back taxes from companies that have taken the free lunch deduction in years past.
The court said certain employees, such as food servers and dealers, could continue receiving complimentary meals tax-free due to their need to remain on the job throughout their shifts.
But protesters at Tuesday's rally said they believe the IRS will eventually try to extend the tax to all service employees.
"If the IRS gets one of us, they will eventually get all of us," said Gary Kane, a bellman at the Las Vegas Hilton.
Workers complained that free lunches are a necessity for everyone.
"A free, full meal is a necessity, not a luxury," Turrin said.
From a podium beneath the huge MGM lion, speaker after speaker blasted the IRS. Cars passing through the intersection of Las Vegas Boulevard and Tropicana Avenue honked in support, often drowning out the speakers.
Glen Arnado, political action director for the Culinary Workers Union in Las Vegas, said the rally was intended to dramatically demonstrate what would happen if thousands of casino workers were set loose in Las Vegas to find lunch every day.
The casinos have long argued that the cost of a free lunch is worth the extra productivity they get by keeping their employees on-site.
"We don't have the time nor the facilities to go get lunch," agreed John Long, an electronics technician at the MGM, in an interview.
Nevada Sen. Harry Reid said he would push for congressional legislation to change the Tax Court ruling, but said it was unlikely to pass unless the issue was cast as a national problem.
"This is not a Nevada problem, this is a problem that's going to affect every service worker in America," Reid said.
Reid urged protesters to organize congressional mail and phone campaigns with their colleagues in other cities. In an interview after the rally, Reid said he was willing to introduce legislation to overturn the ruling.
"I will, but we're going to have to show that it's more than a Nevada problem," Reid said.
Arnado said the rally would kick-off a national campaign to change the Tax Court ruling.
The irony of the Tax court ruling's dual effect on both employees and casinos was not lost on all attendees.
Arnold Wilson, another electronics technician at the MGM, noted in an interview the issue did not even come up until casinos started noting the free lunches on employee pay checks as a way to record the expense for tax deduction purposes.
"When I first started here, it wasn't on your pay check," Wilson said. "I think part of it is MGM is to blame."
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