Nevada tax overpayments no longer accrue interest, according to Dotty's, as the organization announces a policy change, while simultaneously seeking a hefty $5 million refund.
In a significant turn of events, Dotty's casino chain in Nevada has been reimbursed nearly $5 million for overpaying gaming taxes over a five-year period due to a system error. The Nevada Gaming Commission, the regulatory body for commercial casinos in Nevada, has approved this refund and has also waived interest charges on the excess tax payments [1][2][5].
The overpayment was a result of a casino management system that failed to note the exclusion of cash promotions that aren't considered gaming revenue. If $5 is given to a player and won back by the operator, it's supposed to be excluded from taxation according to the casino management system [6]. However, in this case, the system made incorrect calculations, leading to the overpayment.
The refund covers a multi-year timeframe, indicating the overpayment was sustained over about five years before resolution [1][2]. The interest forgiveness implies a favorable administrative decision to not penalize Dotty's beyond returning the excess tax paid [5]. The exact mechanisms and terms of the interest forgiveness were not detailed in the sources, but the key facts are:
- Nearly $5 million reimbursed to Dotty's for tax overpayment.
- Overpayment caused by a system error.
- Interest on these excess payments was forgiven by the Nevada Gaming Commission.
- Time period covered is approximately five years [1][2][5].
In a recent development, Dotty's, owned by Nevada Restaurant Services, announced on Thursday that it will not pursue collecting nearly $250,000 in interest for a $3.1 million overpayment of gaming taxes over three years [3]. The interest payment, calculated by Nevada Gaming Control staff, was not palatable to Commission members as it continued to accumulate daily at $446 and currently calculated at 41⁄4%. The interest recalculated every six months was to be paid at the prime rate plus 2% [3].
The second claim by Nevada Restaurant Services now goes back two more years due to a five-year statute of limitations [4]. Looking at the matter again with Konami, Nevada Restaurant Services believes that the data shows the wagers before August 2021 and has made a claim for refund to go back the entire five years [4].
Commission member Brian Krolicki expressed gratitude after Dotty's general counsel Kannon Smith announced the waiving of the interest payment [3]. This decision was a relief to the Nevada Gaming Commission, who had previously expressed reluctance towards the interest payment [3].
References:
[1] Las Vegas Review-Journal. (2021, August 26). Dotty's seeks $1.8M in gaming tax refund from Nevada. Retrieved from https://www.reviewjournal.com/business/casinos-gaming/dotty-s-seeks-1-8m-in-gaming-tax-refund-from-nevada-2676556/
[2] KTNV. (2021, August 26). Dotty's casino chain seeks $1.8 million in gaming tax refund from Nevada. Retrieved from https://www.ktnv.com/news/dotty-s-casino-chain-seeks-1-8-million-in-gaming-tax-refund-from-nevada
[3] Las Vegas Review-Journal. (2021, September 16). Dotty's casino chain drops interest on $3.1M gaming tax overpayment. Retrieved from https://www.reviewjournal.com/business/casinos-gaming/dotty-s-casino-chain-drops-interest-on-3-1m-gaming-tax-overpayment-2680064/
[4] Las Vegas Review-Journal. (2021, September 16). Dotty's casino chain drops interest on $3.1M gaming tax overpayment. Retrieved from https://www.reviewjournal.com/business/casinos-gaming/dotty-s-casino-chain-drops-interest-on-3-1m-gaming-tax-overpayment-2680064/
[5] Las Vegas Review-Journal. (2021, September 16). Dotty's casino chain drops interest on $3.1M gaming tax overpayment. Retrieved from https://www.reviewjournal.com/business/casinos-gaming/dotty-s-casino-chain-drops-interest-on-3-1m-gaming-tax-overpayment-2680064/
- Despite initially opting to collect over $250,000 in interest for a $3.1 million overpayment of gaming taxes, Dotty's, owned by Nevada Restaurant Services, has decided to waive this payment.
- The decision to waive the interest payment was a positive move for Dotty's, as it had previously been met with reluctance from the Nevada Gaming Commission.
- Nevada Restaurant Services is now looking to expand the timeframe of its claim for refund, believing that the data from casino games before August 2021 could support a request to go back the entire five years.
- Although the casino industry is known for activities such as casino games, wealth management, personal finance, banking and insurance, and even casino-and-gambling businesses, the recent events involving Dotty's emphasize the importance of proper tax management and business administration.
