Harrah's argues that hotel rooms which are comped or free are not subjected to sales and occupancy taxes, based on the agreement between Harrah and Greater New Orleans Hotel & Lodging Association (HLA).
The Department of Revenue, however, stated if the casino gives the room away, taxes should still be paid. Currently, the state takes 10% off the room’s price. First Circuit Court of Appeal upheld the 2019 decision made by 19th Judicial District Court Judge William Morvant, stating that the Department’s right to the missing taxes is “a clear and unambiguous” and that the Department trumps HLA.
The money would be distributed among the Ernest N. Morial Convention Center and the Louisiana Superdome Commission and the state itself. If Harrah’s paid their taxes accordingly, the three parties would benefit from $2-3m per year.
The casino reportedly has some funds (close to $40m) set aside in case of unfavorable ruling, but there’s still the option to appeal the decision to the Louisiana Supreme Court.
