Tuesday, April 6, 2004 | 10:57 a.m.
CARSON CITY -- Forty-one casinos want a tax refund of $20 million for the sales tax paid on complimentary meals for their guests and employees over a three-year period.
Chuck Chinnock, executive director of the state Department of Taxation, said Monday the casinos have joined in submitting their request and he wants to do a full-scale audit on each one.
"They're taking a different interpretation of the law," Chinnock said.
He said most of the requests have previously been denied and the casinos can now ask to have their cases heard by a hearing officer. They then have the option to appeal to the Tax Commission.
Officials said a company, which they declined to identify, has been recruiting casinos to file a joint appeal of the tax on complementaries. The firm would earn a percentage of any refund granted.
Chinnock told the Nevada Tax Commission he wanted to do a complete audit on these businesses, rather than just looking at the tax paid on the complimentary and employee meals.
Chinnock said audits in the past have found "non compliance" by casinos on tax issues and it has been several years since a complete audit was done of the industry.
Commission Chairwoman Barbara Smith Campbell said if the department does an audit based on the refund request, it would preclude the normal periodic compliance audits.
She said some of the casinos are "higher risk taxpayers" and the department should make sure they are in compliance with other taxation issues.
The commission unanimously endorsed Chinnock's recommendation for complete audits on the hotels-casinos that are seeking the refund.
The commission also agreed to go forward in negotiating a new contract with OSI Collection Services, Inc. to chase down delinquent taxpayers, even though its present contract has not produced strong results.
Dino DiCianno, deputy director of the taxation department, said it turned over to OSI for collections total debt of $21 million, which includes back taxes, penalties and interest when the contract was first signed in September 2002.
OSI has collected only $16,000. But DiCianno said these were "very old debts" and most of them had been written off. He said the department collected an additional $30,000 from these debts because of the liens placed on property.
DiCianno told the commission that OSI was "not as successful as we would like" but it gives the state another way to collect those debts.
DiCianno said the new contract to be negotiated will allow the private company to go after active and more recent accounts that the department has trouble collecting. Under the present contract, the company receives 11.75 percent of the debt it collects. That percentage is paid by the delinquent taxpayer.
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