Pennsylvania’s Mohegan Sun Pocono is appealing the ruling of an informal hearing staged by Luzerne County affirming that it properly assessed hotel taxes on complimentary rooms.
The dispute originated in 2018, when the county notified the casino it owned $1.36 million in delinquent hotel tax on complimentary rooms booked from January through August that year. Mohegan filed an objection, and presented evidence opposing the tax at an informal hearing. Last month, the county notified the casino it was reaffirming that the tax was proper, and demanding payment within 30 days.
Mohegan Sun has filed an appeal with the Luzerne County Court of Common Please seeking an order to reverse the county’s decision, arguing that complimentary rooms are a promotional expense, and thus should not be subject to the county hotel tax. The appeal is asking for a declaration that taxing complimentary rooms is impermissible, and to award the casino attorney fees and costs.
Filed by Attorney Robert N. Gawlas Jr., of Rosenn, Jenkins & Greenwald LLP, the casino’s appeal maintains that the 5 percent county hotel tax is authorized only on “consideration” hotel operators receive for each room rental transaction, which does not apply to a comp room because “there is no payment or quid pro quo of any kind required from the guest in exchange for the complimentary room.
“Past patronage prior to the provision of the complimentary room is insufficient to constitute ‘consideration,’ as it was neither rendered nor bargained for in exchange for the complimentary room.”
The hotel tax is 11 percent in Wilkes-Barre, where the casino is locate. The state charges 6 percent, and another 5 percent was tacked on in the county in 1996 solely to help fund county tourism and the Mohegan Sun Arena in Wilkes-Barre Township.
