Court exempts complimentary food from tax | TahoeDailyTribune.com
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Court exempts complimentary food from tax

Nevada Appeal

CARSON CITY – The Nevada Supreme Court ruled Thursday that complimentary meals given to casino guests and employees are exempt from the state sales tax.

The issue was raised when the Sparks Nugget asked the state Department of Taxation to refund the taxes it paid on complimentary meals between April 1999 and February 2002. The department refused, and a district court agreed the meals were taxable.

The Nevada constitution exempts from taxation all “food purchased for human consumption.” The only exceptions are “prepared food intended for immediate consumption” – a reference originally intended to ensure restaurant meals were taxed.

In the Nugget’s case, six of seven justices concluded the free food was exempt because “no taxable event occurred when the Nugget provided complimentary meals to its patrons and employees.” In essence, the food wasn’t sold, it was given to employees and patrons, and therefore, there was no sale on which to apply the tax.

Justice Michael Douglas filed the only dissent, arguing that the Legislature intended the exemption to cover the purchase of food for preparation and consumption at home, not meals provided free of charge or otherwise by a restaurant.

“Thus, Nevada law unequivocally requires a tax to be paid on meals that are provided free of charge to patrons and employees,” he stated.

He argued the majority had created a loophole in Nevada’s sales-tax law.


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