Harrah’s New Orleans loses appeal in fight over $50-million tax bill
The casino resort doesn’t believe it should pay taxes on comped hotel rooms
A case in court had the state of Louisiana and Harrah’s Casino in New Orleans fighting over a pending tax bill that might be worth $50 million. An appeals court in Baton Rouge ruled that the casino owes this money to the state for unpaid taxes since 2001. This case has been ongoing in court since 2010 and Harrah’s bases its position on an agreement that had been signed in 2001 that, according to the casino operator, allowed the company to not pay sales and occupancy taxes for those hotel rooms that they “comp” or discount to their customers or that they comp at hotels owned by others.
The state, through its Department of Revenue, claims that even if Harrah’s decides to give away occupancy in one of the rooms, it still has to pay taxes to the state. The current tax is set at 10%, so, for a $200 a night hotel, they need to pay $20 to Louisiana. The first ruling on this matter came from 19th Judicial District Court Judge William Morvant, whose verdict was upheld by the First Circuit Court of Appeal in a 2-1 ruling on Wednesday. In 2019, Morvant said that the Revenue Department had a “clear and unambiguous” right to the taxes.
The funds that Harrah’s now has to pay – almost $50 million – will go mainly to two different state-owned facilities, the New Orleans, the Ernest N. Morial Convention Center and the Louisiana Superdome Commission; the rest of the money is going to state coffers. If the casinos would have continued to pay the taxes that corresponded, Louisiana would have had $2 million or $3 million more per year. Harrah’s can fight the verdict; however, there’s not much chance it would win after receiving two defeats. How much it will have to pay will be determined in a later court hearing.