In a 2-1 ruling, the Louisiana First Circuit Court of Appeal recently upheld a 2019 decision by 19th Judicial District Court Judge William Morvant stating the Louisiana Revenue Department had “a clear and unambiguous” right to collect from Harrah’s New Orleans up to $50 million in back taxes dating to 2001.
Harrah’s had claimed in court since 2010 that under a 2001 law, it is exempt from paying to the state sales and occupancy taxes on hotel rooms that are comped or discount to their customers or comped at other hotels. The current room tax is 10 percent, meaning the state would collect $20 on a $200 hotel room.
Harrah’s can request that the three judges reconsider their decision, or it could appeal to the Louisiana Supreme Court. A yet-to-be-scheduled trial will determine how much money Harrah’s actually would owe.
In the appeals court decision, Judges J. Michael McDonald and Wayne Ray Chutz ruled in favor of the Revenue Department. Siding with Harrah’s, Judge Mitchell Theriot stated he did not believe the tax applied when the company comped rooms at hotels owned by others.
Most of the money would go to two state-owned facilities in New Orleans, the Ernest N. Morial Convention Center and the Louisiana Superdome Commission, and also to the state treasury. If Harrah’s had been paying the tax, the two entities and the state together would collect an additional $2 million to $3 million annually.
