Gamers’ prospects looking good on comped-meal tax issue

By David McGrath Schwartz

Friday, June 27, 2008 | 6:15 p.m.

The bill in Carson City that could help block a $150 million tax rebate to casinos is in danger of dying.

After the governor earlier in the day said he wanted the Legislature to close the loophole that allows casinos to get a tax rebate for comped meals they gave guests and employees, his office now says the proposal is being reviewed.

Here's the back story:

A casino up north argued that it should not have to pay sales tax on meals it comped employees, and sought a rebate of about $2 million. The Supreme Court agreed with him.

Then the floodgates opened up, and casinos throughout the state sought about $150 million in tax rebates. About $60 million of that would be from the state.

Already faced with a huge state deficit, the state appealed to the high court to ask them to reconsider their position.

The bill before the special session today sought to clarify the legislature's intent in regards to comped meal, to strengthen their case that the comped meals should be taxed.

It passed unanimously in the assembly. But then gaming lobbyists woke up, and started talking to the governor's staff and legislative leaders. A key state senator said this afternoon that it looked like the bill would not pass, and instead the issue would be debated in the 2009 session.

That could come too late. The Supreme Court is expected to make a ruling on the case in July.

If the Supreme Court holds up its decision, it could mean further cuts in the state.

Earlier today, Gibbons said the Supreme Court decision has put the “state in a very tenuous position” and “I want them (the Legislature) to close that loop so that we don’t get ourselves in a further problem dealing with it down the road.”

To permit this to continue could result in “an enormous problem for the state of Nevada,” Gibbons said.