Las Vegas, NV – The Nevada Legislature on March 10 passed a 3% hike in the occupancy tax that will impact hotels in Clark and Reno Counties and pump an estimated $200 million annually into the general fund.
Local media reported Governor Jim Gibbons said he would neither sign nor veto the bill. Thus, by law, the new increase – which raised the occupancy tax from 9% to 12% – took effect five days after the vote, on March 15.
At least one-third of the new revenue will go to aid Nevada public schools, a worthy cause that is difficult to oppose.
But the vote came the same week the $980 million expansion of the Las Vegas Convention Center was formally put on hold for at least a year due to the tourism slump and accompanying decline in the same hotel tax revenues.
The situation has trade show organizers worried that with a tourism-savvy state such as Nevada voting to increase room taxes, other major destination cities will give in to the same temptation to tap into the exhibition market to make up their budget shortfalls.
The focus on local politics was evident in Carson City when the Nevada tax increase was debated by the state Senate. Media reports from the capital said the objections to the increase did not revolve around the impact on tourism but rather how the spoils would be divided up among Nevada’s counties.