State loses appeal in casino use tax

Sun Capital Bureau

Thursday, July 17, 2008 | 3:32 p.m.

CARSON CITY – The Nevada Supreme Court has refused to retreat on its decision awarding a refund of an estimated $100 million to Nevada casinos that paid tax on the free meals given to their high-rolling guests and employees.

The court denied the petition of the Nevada Taxation Department to reconsider its prior ruling in March that there was no taxable event when the casinos gave out the complimentary meals.

In its decision Thursday, the court said the arguments raised on a request for a rehearing by the taxation department are the same as before and it “did not overlook, misapprehend or misapply the law….”

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In anti-tax Nevada, policy can be pawned (5-14-2008)
Nevada seeks rehearing of costly court ruling (4-14-2008)

Dino Dicianno, director of the Taxation Department, said he has not had time to study the denial of the re-hearing. But he said the refund could be up to $100 million. The refunds would have to come from the state and local governments.

Some of the casinos have offered to take their refunds in phases. Dicianno said he would meet with the Nevada Taxation Commission to determine the procedure.

The suit was originally filed by the Sparks Nugget which lost in District Court in Reno. But the Supreme Court overturned the ruling of District Judge Brent Adams. The Nugget estimated it was owed $501,369 for taxes paid the state and local governments and school districts from April 1, 1999 to Feb. 28, 2002.

The court, in its decision today, said the Nugget is required to collect sales tax on the meals it sells to its customers but not on the meals given away.

The court also rejected the request of the Taxation Department to send the case back to Judge Adams for further fact-finding on the issue whether the Nugget received “consideration” for its complimentary meals.

The court, in denying a re-hearing, said the Taxation Department already had the opportunity to build a record on this issue but failed to do so.

The Gibbons administration introduced a bill in the special session of the Legislature to change the law to stop further refunds. It passed the Assembly but failed in the Senate. Senators agreed it could be taken up in the 2009 regular session.

Discussion: 1 comment so far…

By NLVResident

7/18/08 at 6:53 a.m.

Suggest removal

The Sun acts like this is a recent decision. The court denied the petition on June 8, 2008, and a certified copy was either delivered or mailed to the parties on June 19, including the Legislative Counsel. So, who knew what and when? Andy why the delay in reporting the court's decision? If the court denied the petition BEFORE the Special Session, why did the Senate kill AB 2, clarifying the Legislature's intent that comped meals were to be taxed? These are the questions that journalists should be asking.