Clark County, Strip resorts settle clash over room taxes

Clark County agreed Tuesday to refund $155,000 to Paris Las Vegas, settling a dispute over room taxes 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 had allegedly underreported nearly $1.7 million in room revenue over three years and, therefore, owed more than $200,000 in room taxes, according to the settlement agreement.

The audit’s findings, supported by County Manager Yolanda King, highlighted the two sides’ differing interpretations of “discounts” and “room allowances.” The terms are important because both incentives get excluded from taxable gross revenue.

Specifically, Paris had classified as discounts and room allowances the incentives it provided to people who reserved blocks of rooms at the hotel. The county disagreed with that interpretation.

Paris sued the county in 2018 despite paying the local government nearly $300,000 under protest, including penalties and interest. A Clark County District Court judge ruled in favor of the resort, finding that Paris had properly categorized its incentives and rightfully excluded them from gross receipts, court records show.

The court last year also ordered the county to perform a new audit and to use only plain-meaning definitions to determine whether an incentive constituted a discount or room allowance.

The issue prompted the County Commission to pass a resort industry-supported ordinance in December redefining room tax-related terms for clarity.

The deal unanimously approved by the commission Tuesday also holds implications for several other Caesars properties, including Caesars Palace, The Linq Hotel and the Rio.

Caesars maintained a half-dozen properties overpaid room tax between 2016 and 2020 by including group booking incentives in gross receipts, according to the settlement agreement.

The resorts funded the portion of room tax themselves as they did not collect the money from guests, settlement paperwork shows. Although the properties had filed refund claims with the county, they will drop those pursuits as part of the settlement.

Also, the county will issue final findings for finished audits on Caesars properties. None of the assessments will be related to group booking incentives.

Before the settlement was reached, the county had appealed the lower court ruling to the Nevada Supreme Court.

A county spokesman declined to comment on the agreement Tuesday, and representatives from Caesars did not respond to an inquiry by deadline. But the settlement also offered a suggested public response for both parties: “The matter has been resolved on a mutually satisfactory basis.”

Contact Shea Johnson at sjohnson@reviewjournal.com or 702-383-0272. Follow @Shea_LVRJ on Twitter.