Nye County investigating its room tax fund amid waived late fees

Following a revelation by the Nye County Treasurer’s Office last year, Nye County is now launching a focused audit on its room tax fund.

The Nye County Room Tax fund receives the revenue generated by the tax charged on stays in hundreds of hotel rooms, RV slips and other forms of transient lodging throughout the county and each community is governed by its own room tax code or ordinance.

Under the county’s Room Tax Ordinances and Forms webpage, documents show that Pahrump, Beatty and Gabbs each have a transient lodging tax of 9% while Tonopah’s comes in at 8%. Amargosa Valley’s room tax is 6% and both Round Mountain and Manhattan have codes outlining a transient lodging tax of 1%.

Businesses operating these establishments are supposed to pay their room taxes monthly, with penalties in place for late payments. However, it appears in some cases, late fees have not been assessed.

During the Nye County Commission’s March 4 meeting, Nye County Assistant Manager Lorena Dellinger explained that Nye County Treasurer Raelynn Powers had notified her in October last year of the situation. “I was also made aware of an investigation opened by the sheriff’s office, which resulted in a request for an audit,” Dellinger stated.

The town of Tonopah has already started reviewing the situation itself and communications between officials with Tonopah and Nye County detailed around $18,000 in late payment fees that were apparently waived for lodging facilities in its community over the past four years.

The Nye County Sheriff’s Office’s request for an audit of the room tax fund was made on December 3, 2024 but the county had not been able to act on it immediately, as staff was already in the midst of conducting its annual county-wide financial audit with contractor Dan McArthur.

“We were already late submitting for our audit, which required requests for extensions,” Dellinger detailed of the delay. “And we were well on our way to a second extension, which we were notified that we wouldn’t receive.”

With the regular county-wide audit finished, McArthur now has the time necessary to address the room tax issue.

The room tax audit will look into all components of Nye County, including Amargosa Valley, Beatty, Gabbs, Manhattan, Round Mountain, Pahrump and Tonopah and focus on the years 2021 through 2024. It is intended to, “…verify timely filing and payment of monthly room tax within 15 days following the last day of the month in which revenues were earned and, if applicable, verify assessment of a late filing penalty of 10% plus 1% interest per month until paid,” according to the letter of engagement from McArthur’s office.

The letter goes on to state that the room tax audit would begin on or about Monday, March 10 and continue through April, with a tentative completion date of April 30.

“We will issue a written report upon completion of our engagement that lists the procedures performed and our findings,” the letter reads.

Nye County Commissioner Debra Strickland made the motion to approve the focused audit with a not-to-exceed cost of $29,800. Commissioner John Koenig offered a second and the motion passed 4-0 with commissioner Bruce Jabbour, who is in the hospitality industry, abstaining due to a potential conflict of interest.

Contact reporter Robin Hebrock at rhebrock@pvtimes.com