Sales Tax on Comped Meals Heading to Nevada Supreme Court
Last August, I wrote about a tax case in Nevada requiring Boyd Gaming to collect and remit sales tax on the value of complementary meals provided to its gamblers. Boyd Gaming then appealed the decision to the Nevada Tax Commission.
The Las Vegas Sun is reporting that the Nevada Tax Commission affirmed the ALJ determination. The millions paid by Boyd to the State representing the sales tax at issue for certain periods will stay with the state. At least for now.
This issue isn’t significant only for Boyd Gaming. According to the article, every casino in the state has a similar appeal pending. I have no reason to believe the results of pending appeals will be any different.
The issue is whether the comped meals are provided in exchange for the player’s agreement to gamble. If so, the transaction is considered a retail sale subject to sales tax in the state. The Nevada Supreme Court is likely to examine the issue.
If the Nevada Tax Department prevails, we may see a major change to how casinos approach providing rewards to its patrons.