Las Vegas Sun

March 28, 2024

Tax Commission to review settlement agreement on $350 million comped meal dispute

The Nevada Tax Commission has called a special meeting Tuesday to review a last minute deal to settle a $350 million tax dispute on whether casinos should pay taxes on the free meals they give their employees and patrons.

The settlement would resolve a long-simmering battle that is pending before the Nevada Supreme Court.

If the court were to rule against the state in that case, lawmakers would be forced to cover up to $350 million in back taxes. If the court were to rule against the casinos that are disputing the tax, the state could continue to charge sales tax on the free meals — a lucrative future revenue stream.

But a gaming source says the state has agreed to no longer tax the meals in exchange for the casinos backing of their demand for the $350 million refund. Under the settlement agreement, some smaller properties would still be given a refund. But the larger casino companies behind the lawsuit — Boyd and Wynn — would cease efforts to collect a refund.

"It's a $350 million coin flip," the source said.

The settlement, which must be approved by the Nevada Tax Commission, would also require the Nevada Legislature to pass a new law in the final days of the session specifying that the meals are no longer taxable. That bill has yet to be introduced as negotiations continue.

For years, lawmakers have punted on the question of whether to continue levying the tax fought by the powerful gaming lobby, refusing to wade into the legal battle.

Join the Discussion:

Check this out for a full explanation of our conversion to the LiveFyre commenting system and instructions on how to sign up for an account.

Full comments policy