Nearly $5 million in gaming tax revenue has not been collected by Washoe County due to an accounting error. The tax went uncollected for more than six years.
County officials said that money could have helped during the recession.
“It’s unfortunate that it happened,” said County Manager John Slaughter. “What we believe happened in 2009 is an error was made on how it was calculated, which compounded … over time and reduced how much we were billing gaming operators for.
“So this is a tax is placed on a gaming operator’s business license. They pay it quarterly. Prior to 2009 it was being billed and paid properly.”
Slaughter said that new fiscal staff discovered the error in mid-November 2015, and the county hired an auditor to investigate the issue.
“Once this error was discovered, Washoe County administration took action and retained an independent audit firm, Grant Thornton, who confirmed that an error (occurred) dating back to 2009,” Slaughter said. “Grant Thornton also provided recommendations to improve internal controls to prevent this from happening in the future.”
Attorneys are exploring if the county can collect that money, or what possible next steps can be taken to address the problem, and “the Board of County Commissioners will review the issue and options at a future meeting,” Slaughter added.
County Commissioner Kitty Jung said more investigation is needed: “It needs to be looked at much deeper perhaps with law enforcement as well. To have changed so dramatically and having nobody noticed that — it stinks to me, frankly.”
County officials stressed that the problem should have never occurred in the first place and added that the gaming tax is less than one percent of all taxes they collect.
The correct amount will be billed starting July 1.The following jurisdictions are recipients of the gaming tax, which is collected from any establishment in the county that has gaming operations:
- Washoe County
- City of Reno
- City of Sparks
- Three General Improvement Districts: Incline Village GID, Sun Valley GID and Palomino Valley GID
- Three Fire Protection Districts: Truckee Meadows, Sierra, and North Lake Tahoe, and
- Two other local districts: Verdi TV District and Carson Truckee Water Conservancy District.
