Posted: 10:46 AM May 28, 2012
Reporter: AP

CARSON CITY, Nev. (AP) - Nevada casinos are pressing the state
Department of Taxation to halt the collection of more than $200
million in back sales taxes due on past complimentary meals given
to casino patrons and employees until various legal issues are
decided.

The issue surfaced at a public hearing last week in Carson City
held by taxation department officials, the Las Vegas Sun reported.

The department said earlier this year it would begin imposing a
sales tax on comped meals as of Feb. 15 and assess a 25 percent
penalty as well as 9 percent annual interest on all taxes not paid
by July 31.

The agency, however, is still trying to adopt regulations on how
to collect the sales tax.

Attorney Josh Hicks, who represents casinos and retail
interests, noted litigation over the sales tax on complimentary
meals has been going on for a long time.

He said Boyd Gaming already has appealed one Nevada Tax
Commission decision concerning the issue, and Harrah's is likely to
appeal another. The tax commission has denied Boyd Gaming a refund of $21 million and Caesars Entertainment a refund of $31 million.

Hicks urged the department to delay any decision until the
Nevada Supreme Court rules on the matter. The case is still pending
in district court.

But department officials say they'll move forward with
processing the regulations on how to collect the sales tax, and the
issue will then be up to the tax commission.

The department said earlier this year it would begin imposing a
sales tax on comped meals as of Feb. 15 and assess a 25 percent
penalty as well as 9 percent annual interest on all taxes not paid
by July 31. But the regulations are needed before that can happen.

The tax commission, at a June 25 meeting, is expected to
consider the regulations and whether the statute of limitations
applies to some of the back taxes.

The issue has dragged on for years and has huge consequences for
state coffers and casino companies in particular, as well as other
businesses such as restaurants and taverns that provide meals to
employees.

In 2008, the Nevada Supreme Court, in a ruling favoring John
Ascuaga's Nugget in Sparks, struck down imposing a use tax on free
meals but left unresolved the question of whether such meals are
subject to sales tax.

Since then, casinos around the state have petitioned for refunds
of those use taxes totaling hundreds of millions of dollars.

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