Washoe County staff is recommending to the Washoe Board of County Commissioners collection of nearly $1 million in gaming taxes that went uncollected by the county since 2009.
The county discovered late last year that taxes to businesses with gaming licenses had been going uncollected at a total of nearly $5 million.
“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.”
After an outside review and legal opinion, nearly $1 million is being reconsidered for collection.
Gaming operators, under a proposed agenda item for Tuesday’s County Commission, meeting, would have one year to pay the amounts due in the current fiscal year.
According to a staff report,
“The District Attorney has opined that Washoe County may retroactively bill gaming operators for at least several years’ past due amounts…. After much consideration … staff is recommending that the County forego retroactively billing gaming operators for any amount owed during the fiscal years 2008-09 through 2014-15 for the following reasons:
Over 340 commercial businesses receive gaming bills quarterly. During the seven year period that gaming taxes were under-billed, many of these operators have ceased operating, changed ownership (sometimes more than once), and the basis for their bill may have changed many times.
We believe that any attempt to retroactively collect not only will involve many recalculations … but will be met with legal challenges with collections delayed for many years and involve a significant amount of staff time.”
Staff is also requesting from the board direction on how to proceed with payment of the collected taxes to local governments, which would have received the money. The amount owed to those entities is $1.6 million.
“In any case settlement agreements with other local governments would be prepared and executed before distribution of any amount,” according to the staff report.