Travel firms go to Nevada Supreme Court in heated battle over state taxes
High-powered online travel companies have asked the Nevada Supreme Court to order the dismissal of a lawsuit alleging they avoided paying hundreds of millions of dollars in hotel room taxes.
In court papers this week, lawyers for the big-name online booking firms — including Orbitz, Travelocity, Expedia, Priceline and Hotels.com — said they want the Supreme Court to instruct the district judge presiding over the case, Mark Denton, to toss out the suit.
Denton sent the litigation on a path to trial last month when he refused to reconsider another judge’s decision denying a dismissal motion.
The 2020 suit, filed by well-known Las Vegas communications consultants Sig Rogich and Mark Fierro, seeks damages on behalf of the state against the web-based companies. Nevada Attorney General Aaron Ford is backing the case.
Michael Cristalli, one of the attorneys representing Rogich and Fierro, said he hoped the Supreme Court would act fast.
“We’re looking forward to the Supreme Court’s decision because the sooner they rule on it, the quicker the taxpayers and the state of Nevada will get the monies that are owed to them,” Cristalli said Wednesday.
If Rogich and Fierro prevail at trial, it would be a huge windfall for state and local governments dealing with an unstable economy and the ongoing COVID-19 pandemic, according to another plaintiffs lawyer, Dominic Gentile.
More than $1 billion in lost revenues and damages stand to be recovered, Gentile said last month.
A similar lawsuit filed by Clark County to reclaim tax revenues from the online travel companies is proceeding in federal court. Gentile and Cristalli represent the county in that suit.
The travel company attorneys argued in their papers before the Supreme Court that state law bars the Rogich-Fierro lawsuit from going forward because a government entity, the county, is independently pursuing the case.
According to an amended state court complaint, the booking companies for years have been contracting with hotels in Las Vegas and elsewhere in the state to buy rooms at discounted prices and then selling them on their websites to consumers at higher rates. The companies have been charging their customers for the room taxes based on the more expensive retail rates but have only been paying the state at the discounted prices, the suit alleges.
The room taxes pour hundreds of millions of dollars each year into the Las Vegas Convention and Visitors Authority, the Clark County School District, the Nevada Department of Tourism, state and local general funds and other public agencies, according to the lawsuit.
The state suit was originally filed in April 2020 under the Nevada False Claims Act, which prohibits anyone from knowingly concealing or improperly avoiding an obligation to pay money to state and local governments.
Contact Jeff German at jgerman@reviewjournal.com or 702-380-4564. Follow @JGermanRJ on Twitter. German is a member of the Review-Journal’s investigative team, focusing on reporting that holds leaders and agencies accountable and exposes wrongdoing.