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Thread: Taxes when using resort credit?

  1. #1
    Last week at Venetian, I charged a meal to my room. I had a food credit attached to the room and when I checked out, I saw that they did not remove the tax.

    I spoke to a number of Venetian/Palazzo people who said that's how it is, that even though it's considered a comp, you still end up paying the tax.

    I don't recall this being the case at a Caesars property, but there I usually use points and tax comes off. And for the annual 7 Stars trip with the $500 resort credit, I don't pay attention since I don't usually reach that limit. (Of course, they don't make it easy to itemize, since the folio is just blank.)

    Does anyone know why this might be true (assuming it's true)? Seems to me a comp is a comp, and tax should always come off. If that's not the case, we'd be paying taxes on free rooms...


    --max

  2. #2
    When I went to the 24 hour restaurant in the lobby at Caesars and paid using my Total Rewards card, I had to pay the sales tax with cash. I was not staying in the hotel.

    When I charge the same restaurant to my room, and pay with comps there is no tax.

    I couldn't tell you who makes the rules, whether it's the hotel, the casino company, or tax law.

  3. #3
    It's state tax law and it comes up every year in the legislature. Nevada hotels are not allowed to charge tax on comped meals. Since when you use your TR card to pay for meals everything is already set up in the computer as far as what to comp and what not to comp, I would think that if you got charged tax for that meal then it is proper. If you're like Dan and allow this to eat away at you for who knows how long, just give the property a call and keep digging until you get an educated answer.

  4. #4
    Rob stop your pontificating. No one is getting eaten away by this situation. Sometimes smart people want to know what's going on.

    I couldn't tell you why I had to pay tax out of my pocket when I went to the restaurant and paid for the meal with my Total Rewards comps, but when I use the same comps to pay my bill at check-out there is no tax for me to pay.

    Thanks for your pontification but you haven't answered the question either.

  5. #5
    Based on the two California casinos I frequent, Morongo and Pechanga.

    Morongo Rewards deducts 15% off first since I am a Titanium tier member (20% off for Alan since he is Black), the final amount taken out is the discounted price with sales tax added after.

    Pechanga does not deduct anything if a player is paying using their Comp Balance with their CLUB card (they will only offer discount if the item is paid by cash or credit), but the amount taken out of the balance is the price without sales tax applied.

    Thus, my answer is that it is based on the casino.

  6. #6
    I am ashamed to say that I am an expert on this subject.

    I'm even more ashamed to say that I'm answering this question while sitting in my Caesars hotel room at 11:45pm.

    But at least I have a nice view of the Bellagio fountains while I answer it.

    In Nevada, sales tax is not required if a sale isn't actually made. Note that I wrote "required", meaning that the hotel can still charge the tax (but would be required to pass it on to the state), but it's also legal if they charge no tax.

    So when you get a comped meal, there has been no sale made. It's essentially equivalent to them just handing you something for free, which requires no sales tax.

    So if something is comped at the time of sale, then CET charges you no tax. This includes using RCs, Seven Star dinner vouchers, mailed food vouchers, etc.

    There is one exception to this. If you're using your comps at a restaurant NOT owned at least 50% by Caesars, then they are required to tax you. This is because a sale IS being made, and then Caesars is reimbursing the restaurant. So that is taxabale. This is why you will pay tax when using comps at the Strip House (steak house) in Planet Hollywood, or that cafe (I forget the name) located near the front desk at Caesars. Both are privately owned, so a sale IS being made, even if you pay with comps.

    Now, what about charging food to your room -- such as when you have a folio credit on your room?

    Technically, the meal is still being comped. However, it's being comped after the fact, and at that point, the tax has already been charged and entered into the system. So Caesars has no way to remove the tax at that point. Mind you, this COULD be done, but they have not programmed their system this way, so therefore you're stuck paying the tax.

    They used to remove the tax upon request. However, they started having issues with the tax collected not adding up with the tax paid, and the night auditor would end up charging the tax after-the-fact to people's credit cards to "correct" the difference! This happened to me once. I noticed a $6.xx charge on my credit card about a week after checkout, and found out it was because I had the tax removed after charging it to my comped foilo credit!

    So now they just don't remove it anymore.

    A bit annoying, but it's not a lot of money, and you just have to deal with it.

    This is also why you should always pay with RCs instead of charging things to your room, if you're planning to pay the room bill with RCs later anyway. If you pay with RCs on the spot, you will never be charged tax, except at third-party-owned restaurants.
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  7. #7
    Thanks Dan for the info. I don't understand why you're "ashamed" to know this? This is good info and you're a savvy consumer.

    Regarding sales taxes: I've used comps to cover them when charged to my room. My only out of pocket on room charges is tips. Reward Credits never cover tips.

  8. #8
    Thanks Dan. It makes sense, though seems the casinos should alter their systems so bookkeeping is correct. Especially when it comes to taxes.

    Alan -- they always say reward credits/comps don't cover tips, but I've on occasion had tips comp off. There may have been some shenanigans on the back-end to not display it as a tip. Or, as we see with their bad bookkeeping, probably just a mistake.


    --max

  9. #9
    Ive had a host pick up tips for unusual reasons. On a trip to Caesars this year, my tip amounts were inflated dramatically for room service. Room service tips are automatically added to the checks so I could see the tip amounts were not correct. When I called the front desk to check out and I called their attention to the tips being wrong, the front desk called the host on duty, and the host on duty picked up all the tips.

  10. #10
    I once called a host to ask why he didn't comp a pack of gum I bought at the kiosk.... No answer.

    Then I called his boss to complain. Then when I returned home I wrote a dozen emails saying how absolutely appalled I was over the situation.

    Oh---I'm not married. But everybody loves me.
    Last edited by Rob.Singer; 12-30-2015 at 09:25 PM.

  11. #11
    Originally Posted by Rob.Singer View Post
    I once called a host to ask why he didn't comp a pack of gum I bought at the kiosk.... No answer. Then I called his boss to complain. Then when I returned home I wrote a dozen emails saying how absolutely appalled I was over the situation. Oh---I'm not married. But everybody loves me.
    Do you know the difference between Rob Singer and a canoe? A canoe tips.

  12. #12
    Cafe Americano in the lobby of Caesars DOES charge tax (whether you use RCs/comps or not), and you can't pay the tax with your RCs. You have to pay the tax in cash or on your credit card.

    This is because Cafe Americano is owned by a third party company.
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  13. #13
    Last night's dinner was at Old Homestead at Caesars and I paid using Seven Stars annual dinner certificates. Tax was not charged.

  14. #14
    Originally Posted by Alan Mendelson View Post
    Last night's dinner was at Old Homestead at Caesars and I paid using Seven Stars annual dinner certificates. Tax was not charged.
    Old Homestead bugs me because it is a very ordinary steakhouse (decent, but nothing you would rave about), and the prices are super-inflated.

    Even with a comp, I feel like I am wasting my money there.

    I realize that Nobu is even more expensive, but at least Nobu is special and memorable.
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