Las Vegas strip county joins tax combat in opposition to on-line journey corporations – MarketWatch

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LAS VEGAS (AP) — The county with jurisdiction over the Las Vegas Strip has joined a authorized combat to attempt to acquire what attorneys keep may very well be lots of of hundreds of thousands of {dollars} in unpaid resort room taxes owed by greater than 20 on-line journey corporations.

A lawsuit by Clark County echoes claims raised final yr by two Las Vegas communications executives in opposition to on-line resort reserving providers together with Orbitz, Hotwire, Expedia
EXPE,
+2.65%
,
Travelocity, Priceline and Hotels.com.

At stake are “hundreds of millions of dollars in room tax revenue that have been avoided by online travel companies for years and years,” Michael Cristalli, an legal professional dealing with each instances, mentioned Tuesday.

“The county made the determination that it’s in their best interest and the interest of the taxpayers of Nevada to pursue the deficient and continuing tax liability,” he mentioned.

Officials with a lot of the 13 named defendants didn’t instantly reply to e mail messages Monday and Tuesday concerning the case. A spokesperson for Hotel Tonight Inc. declined to remark.

Cristalli and legal professional Dominic Gentile additionally signify communications executives Mark Fierro and Sig Rogich in a case they filed final yr making comparable shopper fraud and unjust enrichment claims.

The lawsuits accuse on-line reserving corporations of chronically underpaying taxes starting from 10.5% to 13.38%, calculated as a share of gross rental receipts.

Both courtroom filings used an instance of a web based journey firm acquiring a room from a resort for $150 and promoting it on-line to a buyer for $200, then paying the state tax primarily based on the decrease wholesale worth of $150.

“This business model deprives Nevada taxing authorities including Clark County of taxes due them on the full value of the transaction,” the county lawsuit mentioned.

The quantity in dispute contains greater than $100 million in unpaid taxes, plus maybe one other $100 million in damages and penalties, Cristalli mentioned.

The income would profit tourism, faculty, transportation and native authorities common fund accounts, in response to the county lawsuit filed May 14 in Clark County District Court.

Attorneys representing not less than 16 named defendants moved the case in July from state to federal courtroom, the place a choose now’s being requested whether or not to ship it again to state courtroom.

In state courtroom, a listening to is scheduled Sept. 2 earlier than a choose in Las Vegas who determined in May to not throw out the bizarre “qui tam” civil lawsuit filed in April 2020 by Fierro and Rogich.

The submitting lets personal citizen whistleblowers be rewarded for profitable outcomes the place they act and the federal government recovers cash misplaced to false claims or different kinds of fraud.

Fierro and Rogich, namesakes of Fierro Communications and The Rogich Communications Group, would stand up to 30% of the cash received of their case, in response to their courtroom submitting.

Tax instances aimed toward comparable practices in different states involving on-line journey corporations, or OTCs, have had blended success.

The impartial nonprofit Tax Foundation surveyed comparable lawsuits in 34 states and the District of Columbia for a 2016 report. It discovered courts in 23 states, together with three federal courts of attraction, concluded that on-line journey providers weren’t topic to resort occupancy taxes. Courts in six states dominated they had been.


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