Clark County and Strip resorts resolve dispute over room taxes
Clark County agreed to reimburse Paris Las Vegas for $ 155,000 on Tuesday, settling a room tax dispute that also involved several other Caesars Entertainment Inc properties.
The conflict between Paris and the county began in 2016 when a county audit determined the resort would have under-reported nearly $ 1.7 million in room revenue over three years and, as a result, owed more than $ 200. 000 dollars in room taxes, according to the settlement agreement.
The audit findings, supported by County Manager Yolanda King, highlighted the two sides’ different interpretations of “reductions” and “room allowances.” The terms are important because both incentives are excluded from taxable gross income.
Concretely, Paris had classified as discounts and room allowances the incentives it offered to people who reserved blocks of rooms at the hotel. The county disagreed with this interpretation.
Paris sued the county in 2018 despite paying the local government nearly $ 300,000 in protest, including penalties and interest. A Clark County District Court judge then ruled in favor of the resort, ruling that Paris had correctly categorized its incentives and rightly excluded them from gross revenue, court records show.
Last year, the court also ordered the county to conduct a new audit and use only simple definitions to determine whether an inducement constituted a discount or room allowance.
The issue prompted the county commission to pass an ordinance backed by the resort industry in December redefining the terms related to the room tax for clarity.
The deal unanimously approved by the county committee on Tuesday also has implications for several other Caesars properties, including Caesars Palace, Linq Hotel and Rio All-Suite Hotel and Casino.
Caesars maintained half a dozen room tax overpaid properties between 2016 and 2020 by including incentives for group bookings in gross revenue, according to the settlement agreement.
The resorts funded the room tax portion on their own, as they did not collect the money from guests, as the settlement documents show. Although the properties have filed claims with the county, they will drop those lawsuits as part of the settlement.
In addition, the county will publish the final findings of completed audits on Caesars properties. None of the reviews will be linked to group booking incentives.
Before the settlement was reached, the county appealed the lower court’s decision to the Nevada Supreme Court.
A county spokesperson declined to comment on the deal on Tuesday, and Caesars representatives did not respond to an investigation on time. But the settlement also offered a suggested public response to both sides: “The case has been resolved on a mutually satisfactory basis. “