Room tax challenges could be a hit to Raiders stadium funds

Raiders.com

Rendering of the new Las Vegas Raiders stadium as seen from the Strip at night. Construction on the 65,000-seat stadium will begin in November and will be completed in time for the 2020 NFL season.

The latest report from the Las Vegas Stadium Authority indicates the Oct. 1 mass shooting could negatively affect expected room-tax revenue for the future home of the Raiders and UNLV football.

Room tax fees brought in $20.3 million for stadium-related expenses from July to November for fiscal year 2018, and were 0.4 percent below the budget, according to the authority.

But figures from October and November saw a bigger dip, according to the report. October’s room tax revenue was $4.6 million, which was 7.9 percent below projected totals. November’s preliminary numbers saw $3.3 million accumulated, and that was 9.8 percent under projected numbers. December’s figures weren’t included.

It is unknown whether the trend will continue into 2018, the report indicates.

“The answer is we do not know at this point,” said Jeremy Aguero, principal of Applied Analysis and the lead staff member for the stadium authority. “We are in the process of evaluating market conditions and other factors with the county and its financial advisers, as well as the Raiders and their financial advisers, in the normal and expected course of preparing for the issuance of stadium bonds.”

Additionally, the report cautions that taxes on internet-access fees collected by Strip properties is in flex because of multiple class-action lawsuits against hotel operators. That, too, could cut into projections for the stadium.

The suit claims the taxes charged on the resort fee is a violation of the Internet Tax Freedom Act, which states internet access cannot be taxed by states and their political subdivisions. The suit claims that hotels along the Strip charged a lodging tax, which included a tax on internet access.

“It could have an impact down the road, but at this point we have no idea to what extent that might be,” said Brian Haynes, Stadium Authority spokesperson. “We have to list it, because it is a development that happened within the last quarter … and could have an effect on the revenues of this authority.”

The properties named in the lawsuits include: Caesars Entertainment, MGM Resorts International, Sands Corp., Wynn Resorts, Treasure Island, Tropicana and SLS Las Vegas, among others. More suits are possible, said local attorney Don Springmeyer, who is one of three lawyers representing the plaintiffs.

Court documents state that “tens of millions of dollars in illegal and improper taxes on internet access in violation of the [Internet Tax Freedom Act], and, upon information and belief, retained 2 percent of the amount unlawfully collected.”

The court document says more than 100 people are involved in the class and the amount exceeds $5 million, allowing them to file under the Class Action Fairness Act.

The room tax also supports the Nevada Department of Transportation, state schools, state tourism and Clark County Transportation, among others.

Springmeyer said it could be a couple of years before a ruling is made, because of many factors, such as whether each case will be heard by the same judge and motions to dismiss by casino companies.

Business

This story originally appeared in the Las Vegas Weekly.

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