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Hotel Occupancy Tax Dispute Entering Mediation

Saturday, January 24, 2015

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A county judge in West Virginia has ordered both sides in a lawsuit over hotel occupancy taxes to make an attempt to settle their differences in mediation before pursuing the suit further.  The dispute between Mountaineer Park casino and Hancock County concerns the amount of tax the hotel should pay the county, and the judge issues a statement tying the results of the dispute to the overall good of the community, saying in part ‘.  .  .  the amount of compensation that is taxable and the amount of the tax that is reasonable and responsible for the benefit of the citizens of Hancock County and Mountaineer Park …’ was at the heart of the dispute. 


The county created a new hotel occupancy tax set at 6% and applied it to the casino.  The casino argues that the tax does not apply to hotel rooms that are provided as a complimentary gift to patrons using coupons or other redeemable rewards.  The argument is essential since they are charging $0 for the room, the tax should be $0.  The casino provides more than 8,000 free hotel rooms to its patrons each month, or about 70% of the rooms that are available. 


The county created the tax to fund construction of a local Convention and Visitor’s Bureau and an overall tourism campaign for the area.  They estimate income from the tax on Mountaineer’s rooms to be about $900,000 annually, if collected as they specify. 


Mountaineer has already lost the issue, but the court has yet to determine how much tax should have been collected during the period the casino failed to do so.  This is what the two sides must now negotiate in mediation. 

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