A number of high-profile online travel companies, including Expedia, Travelocity, Hotels.com and others, have petitioned to the Nevada Supreme Court (NSC) to dismiss a lawsuit accusing them of sidestepping millions of dollars’ worth of taxes on hotel rooms in the state.
According to court filings submitted by attorneys representing the travel firms, the defendants are asking the court to overrule presiding District Judge Mark Denton, who himself refused to dismiss the case last month.
If the NSC does not dismiss the case, it will likely head to trial in the coming months. The state’s Attorney General, Aaron Ford, has come out in support of the plaintiffs’ case.
The suit was originally filed back in 2020 by Las Vegas-based consultants Mark Ferrio and Sig Rogich, seeking damages on the state’s behalf.
Essentially, Ferrio and Rogich are alleging that for years, travel firms have worked with hotels in Las Vegas and around the state to purchase discounted rooms, which they then resell at higher prices. The problem, however, is that the companies have been charging customers higher taxes corresponding to higher room rates, but have only been paying state taxes at the discounted rates.
Per the plaintiffs, this lost tax revenue is affecting state institutions such as the Clark County School District, the Las Vegas Convention and Visitors Authority and more. The suit was filed under the Nevada False Claims Act.
One of the attorneys representing the plaintiffs, Michael Cristalli, told the Las Vegas Review-Journal that he and his clients are “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.”
That being said, a similar lawsuit was also filed against the travel firms in federal court by Clark County, and is currently progressing there as well. The firms have used this as their primary reasoning for dismissing Ferrio and Rogich’s suit, as state law would prevent it from proceeding when a state entity (Clark County) is already pursuing damages.
