weather icon Clear

Nevada to have 4th-worst tax revenue from hotels

Updated June 19, 2020 - 12:09 pm

State and local tax revenue from hotel operations in Nevada will be the fourth lowest among states in the nation in 2020, a new report released by the American Hotel & Lodging Association Thursday says.

The sharp drop in travel demand resulting from the COVID-19 pandemic is also filling fewer hotel rooms, the Washington, D.C.-based association said in issuing a report drafted by Oxford Economics.

The report said the pandemic slowdown would result in a tax loss of $16.8 billion nationwide for the year.

The association says it represents all segments of the U.S. lodging industry that contributes $660 billion to the nation’s gross domestic product. The association’s members support 8.3 million jobs, more than one of every 25 in the United States. Many members also are represented by the closely affiliated Nevada Resort Association.

Oxford estimated Nevada would lose $1.1 billion in hotel room taxes and taxes on sales, gaming and corporations. The report says Nevada trails only large-population states California ($1.9 billion), New York ($1.3 billion) and Florida ($1.3 billion) in the amount of projected tax revenue loss from hotel properties.

Chip Rogers, president and CEO of the association, said it would be years before demand returns to peak 2019 levels.

“Getting our economy back on track starts with supporting the hotel industry and helping them regain their footing,” Rogers said in a statement issued by the association. “Hotels positively impact every community across the country, creating jobs, investing in communities, and supporting billions of dollars in tax revenue that local governments use to fund education, infrastructure and so much more. However, with the impact to the travel sector nine times worse than 9/11, hotels need support to keep our doors open and retain employees as we work toward recovery.”

In a breakdown of the estimate of tax revenue that would be lost this year, Oxford said Nevada would lose $336.7 million in taxes on lodging, seventh highest in the nation behind California, Florida, New York, Texas, Illinois and Hawaii.

But Nevada’s projected loss of $642.4 million in gaming taxes leads the nation. Nevada also is expected to lose $167.9 million in sales tax, second only to California.

The report also says Nevada can expect to lose $2.7 million in corporate taxes. Unlike several other states, Nevada won’t lose any personal income tax revenue from hotel employees, nor any other miscellaneous unemployment and other social taxes.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

Don't miss the big stories. Like us on Facebook.