Nevada Court Considers Tax Fight with Travel Giants

A legal battle over hotel tax payments in Las Vegas is moving forward as a judge considers how much evidence can be collected in a case that could involve more than $1 billion.

Judge Weighs Access to Key Evidence in Tax Dispute

The case, which has returned to the Clark County District Court, involves allegations that the major online booking sites underpaid taxes owed to the state. The lawsuit names companies including Expedia, Orbitz, Travelocity, Priceline, and Hotels.com, as reported by The Las Vegas Review-Journal.

Judge Mark Denton heard arguments at a recent hearing over whether plaintiffs should be given broader access to documents as part of the discovery process. The judge noted that a decision has not yet been issued and that the matter will be examined further.

The case was initially filed in 2020 by consultants Sig Rogich and Mark Fierro, on behalf of Nevada. The companies, they say, used a pricing method that created a disparity between the taxes collected from travelers and what was actually sent to the state. The claim says customers were charged full retail room rates, but payments to Nevada were made at lower wholesale prices, allowing the companies to keep the difference.

Plaintiffs’ lawyers argued that under Nevada law, parties can be held accountable if they knowingly aid in the submission of false or incomplete information to the government. Even if such actions are carried out indirectly, they note that the legal framework is applicable.

Travel Companies Challenge Reach of Tax Claims

On the other side, attorneys for the travel companies said the plaintiffs are trying to push the lawsuit beyond the scope for which it was intended. They argued the scope should be limited to what was originally presented to the state’s legal authorities and cover a specific period starting around 2015.

Another major point of contention is access to documents from other similar suits in other regions. Such materials could help reveal the companies’ nationwide transaction handling patterns, the plaintiffs believe. However, defense attorneys said collecting and reviewing those records would be overly burdensome and not necessarily pertinent to Nevada.

The case has economic implications. The funds in dispute, if the claims are upheld, could go toward supporting public services funded by hotel taxes, including education and tourism initiatives. A trial is due to take place in 2027, according to court records, as no decision was reached during the hearing.