[Southsider2k12]

http://thenewsdispatch.com/articles/2010/0...1e070203250.txt

LCC&VB sues Blue Chip

Bureau says casino should pay tax on ‘comped’ rooms
By Matt Field
Staff Writer
Published: Friday, February 12, 2010 4:17 AM CST
The owners of the Blue Chip Casino wager they can avoid a tax meant to fund the county tourism agency.

Last October, the hotel and casino in Michigan City stopped paying some of La Porte County’s innkeepers tax, a 5 percent levy on the price of hotel rooms. The casino lets some customers stay for free and the company doesn’t think they need to pay the tax on these rooms. Now the La Porte County Convention and Visitors Bureau is suing the casino.

The casino’s decision has had a big effect on the bureau’s cash flow, said Jack Arnett, the bureau’s executive director. He cut $200,000 from this year’s budget to compensate for the money the bureau may lose this year.

The casino decided not to pay after another casino in Indiana won a court ruling that said it didn’t have to pay sales tax on items it gave away, said Michael Bergerson, who is representing the Convention and Visitors Bureau in the suit.

While the ruling exempts hotels from paying tax on something they give away, the same thinking should not be applied to rooms given to customers for free, Bergerson said. The state law says that the tax is due on rooms “rented or furnished,” he said. That means that even if the room was not rented, the tax is still due.

Using the sales tax ruling and applying it to the innkeepers tax does not hold up, he said.

“We’re trying to compare apples to oranges,” Bergerson said.

The casino management disagrees. Spokesman David Strow said his company received a refund on the sales taxes it paid on the rooms it had given away for free. Therefore, he said, they should not have to pay the innkeepers tax on the so-called comp rooms. He would not indicate how the company would argue its case.

Arnett said the bureau projects it will collect about $900,000 in innkeepers tax in 2010 countywide. He estimated that the taxes collected from the casino will make up a third of that total. The county has just under 2,000 hotel rooms, he said. The casino has nearly 500 of those.

Though the casino and the tourism agency are at odds in this case, both parties say they have a good relationship in promoting tourism.

[Tom Burns]

http://thenewsdispatch.com/articles/2010/0...1e070203250.txt

As a 20 year member of a regional CVB I have seen this interpreted both ways. Illinois seems to not collect the tax on comp rooms, but Missouri does at least in the parts of those states in which we do business.

[Southsider2k12]

http://thenewsdispatch.com/articles/2010/0...47197646066.txt

Innkeepers tax

Does it apply to ‘comped’ rooms?
Published: Sunday, February 14, 2010 11:08 PM CST
Editorial

The Issue:

Blue Chip says it shouldn’t have to pay tax for free rooms.

Our Opinion:

This hurts the Visitors Bureau, but the only clear answer will come from a court.

The La Porte County Convention and Visitors Bureau needs money from the hotel tax to operate, so its lawsuit against Blue Chip to collect the tax on “comped” hotel rooms is crucial to its efforts to bring tourists to the county.

At the same time, Blue Chip isn’t collecting any rent when it gives people a free night at the hotel, so it might not seem fair to assess the tax on a room that wasn’t paid for. Of course, casino hotels commonly give away a certain number of free nights in their hotels to attract business for their casinos.

Moreover, the hotel, which stopped paying the innkeepers tax last year, points to a court ruling in a case saying a casino didn’t have to pay sales tax on items given away.

The Visitors Bureau counters that the law says the innkeepers tax is a different tax, and it is due on rooms “rented or furnished,” implying comped rooms are not exempt.

At stake is some $300,000 a year — a third of the amount the innkeepers tax raises for the Visitors Bureau. And it’s also a significant amount of money for a casino, even one that deals in millions of dollars, especially during a recession and at a time when Blue Chip’s business is reduced because of competition from Four Winds Casino in New Buffalo, Mich.

The dispute between Blue Chip and the Visitors Bureau hasn’t stopped the two from working together in the promotion of La Porte County. Their interests are the same in that regard.

This is a disagreement based on what the law says, or what it was meant to accomplish. As such, the decision will be up to the courts.

[Southsider2k12]

So they are collecting the tax and keeping it for themselves? Wow.

http://thenewsdispatch.com/articles/2010/0...26747324748.txt

Hotel visitor taxed for free room

Published: Wednesday, February 17, 2010 11:28 AM CST
After reading about the La Porte County tourism board is suing Blue Chip Casino for innkeepers tax and the editorial by The News-Dispatch, I felt obligated to write.

During 2009, I received three free rooms and dinners for which I received a 1099 tax form from Blue Chip in the amount of $1,100 that I had to pay federal and state taxes on. Therefore, Blue Chip Casino does not give out free comps, so pay the innkeepers tax.

John Mussa

Trail Creek

[Southsider2k12]

http://thenewsdispatch.com/articles/2010/1...18050528113.txt

LCC&VB wants judge ruling in hotel room tax dispute

By Matt Field
Staff Writer
Published: Thursday, October 28, 2010 5:12 PM CDT
MICHIGAN CITY — The La Porte County Convention & Visitors Bureau likely will file a motion to have an Indiana Tax Court judge rule in its favor without a trial in a legal dispute with Blue Chip Casino over a tax on complimentary hotel rooms.

That’s according to Michael Bergerson, the LCC&VB attorney, who said his client will likely file a motion for summary judgement in the dispute of whether the casino has to pay the 5 percent so-called innkeepers tax on rooms it offers to customers for free.

If the LCC&VB wins on the motion, Bergerson said, “We would be proven correct and recover the innkeepers tax due from the time that they suspended it for the comp rooms.”

Last October, the hotel and casino in Michigan City stopped paying the “innkeepers tax” on complimentary rooms after an appeals court ruling found that Horseshoe Casino in Hammond didn’t have to pay sales tax on items it gave away.

“We think the precedent is very clear that we are not required to pay innkeepers tax on complimentary rooms,” said David Strow, director of corporate communications for Boyd Gaming, which owns Blue Chip, adding, “Our contention is that since sales taxes are not applicable to complimentary rooms that innkeepers taxes are not applicable to those rooms either.”

The LCC&VB, however, sued the casino to have it begin paying the tax on complimentary rooms again. The dispute has since moved to the tax court, where the casino is now suing the La Porte County Treasurer’s Office to get a refund for the innkeepers tax it has already paid on complimentary rooms. The LCC&VB has intervened in the case.

“If (the judge) denies the claim for the refund, that means they owe the money,” Bergerson said.

Judge Thomas Fisher has asked the two sides to set deadlines for when to complete various aspects in the case, Bergerson said, adding revenue from the innkeepers tax is vital to funding the bureau.

LCC&VB Executive Director Jack Arnett has said the bureau will collect about $900,000 in innkeepers tax in 2010. He estimated taxes collected from the casino will make up a third of that total. The county has just less than 2,000 hotel rooms, he said. Of those, about 500 are at the casino.

As the litigation winds its way through the court, both sides say they remain committed partners.

“We remain close partners with (the Convention and Visitors Bureau),” Strow said. “This is just a dispute on interpretation on tax law.”