Dotty’s properties’ $3.1M tax refund suspended by authorities

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The proud owner of 41 licensed casinos, which include popular establishments like Dotty’s and Bourbon Street Sports, found themselves in a bit of a sticky situation after allegedly overpaying their gaming taxes for a whopping 32 months starting back in August of 2021.

Nevada Restaurant Services Inc., the company holding the license, is now on a mission to reclaim over $3 million in tax overpayments that were made in error over this lengthy period of time.

The Nevada Gaming Commission recently had a 45-minute hearing where they ultimately rejected a proposed settlement for the matter. The crux of the issue seemed to revolve around whether the refund should include interest on the overpayment and, if so, how much that interest should be.

The proposed settlement, which spanned five pages, detailed how the NRSI had failed to deduct wagered amounts from gaming-related promotions from their gross revenue of $46.9 million, resulting in the significant overpayment.

In this settlement, it was agreed that the state would reimburse the NRSI a total of $3,120,197.28 in gross gaming revenue tax, in addition to $222,744.12 in accrued interest up until August 22, with daily interest accruing at a rate of $446.09 until the full refund is issued. Each party also agreed to cover their own attorney fees and costs.

Despite the proposed agreement, had it been approved by the commission, the NRSI committed to not contesting the matter in court, aiming for a speedy resolution.

Nevada statutes dictate that the Gaming Control Board should pay interest on refunds at half the prime rate of the state’s largest bank plus 2 percent. However, the commissioners expressed concerns over potentially overpaying a refund that they believed should have been identified sooner by the NRSI management team.

Following the discovery of the error in August 2021 and the subsequent refund request made this month, the commissioners instructed the Control Board to reevaluate the settlement terms, which previously would have required a reimbursement of over $3.1 million, along with an additional $222,744 in interest fees.

Commissioner Brian Krolicki, a former state treasurer, emphasized during the hearing the importance of ensuring that the interests of the state residents were protected, especially given the delay on the part of the NRSI that ultimately led to the inflated refund amount.

Amidst the uncertainty of how the situation would unfold, a representative for NRSI, Smith, expressed a desire to avoid any adversarial confrontation and indicated a preference for an amicable resolution rather than escalating the matter to a hearing.

As the negotiations continue, both parties are hopeful for a fair and mutually acceptable resolution that will bring this tax overpayment saga to a close.

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