Nevada resort industry attacks assemblyman's room tax plan

Hotel resort lobbyists flocked to an Assembly Taxation Committee meeting Thursday to argue against a plan by Assemblyman Harry Mortenson to impose a $3 room tax.

Mortenson, D-Las Vegas, said his AB342 would generate up to $365 million in the next two fiscal years.

The bill would require a $3 nightly tax on rooms for transient lodging. It would exempt people who stay in a room for more than 28 consecutive nights.

The proposal drew expected opposition from heavy hitters from the hotel-casino industry.

Nevada Resort Association lobbyist Harvey Whittemore said his association doesn't support the bill because it's a tax that doesn't include other businesses.

"With respect to this bill, there can be no question that while people are looking for additional sources of revenue for this state, this is one that singles out the gaming industry," Whittemore said.

Rossi Ralenkotter, vice president of marketing for the Las Vegas Visitors Convention Authority, told the committee the time is wrong for imposing a new tax targeting tourists.

He told the committee tourism is dropping due to the war on Iraq, anti-terrorism efforts, a volatile stock market and increased competition from Indian gambling in California.

Ralenkotter also said other cities are trying to attract new tourist dollars by increasing their convention space -- space that will compete with Las Vegas.

Mortenson said a $3 room tax wouldn't raise Nevada's overall tax level above that of other cities competing for convention and tourism dollars.

Representatives from Reno's casinos and hotels disagreed, saying a $3 tax would greatly increase their tax rate.

Ferenc Szony, president of the Sands Regency hotel in Reno, said the average rate for Wednesday night in Reno is $27, meaning the $3 room tax would constitute a greater than 10 percent tax.

"I'd rather see us tax them less and get a lot more people addicted to coming to Reno," Szony said.

Representatives of the Atlantis, Harrah's and Peppermill hotel-casinos also testified against the bill.

Mortenson said he doesn't plan on staunchly defending his bill, and simply wanted to put another tax option on the table.

The committee took no action on the bill.