Room tax audit prompts full investigation

The focused audit on Nye County’s Room Tax Fund is in and the results show that tens of thousands of dollars in late fees have gone unpaid over the last four calendar years, prompting a vow from Nye County District Attorney Brian Kunzi for a full investigation.

The Room Tax Fund audit was authorized by the Nye County Commission in March and conducted by the county’s longtime auditor, Certified Public Accountant Dan McArthur. The scope of the audit was narrow, only including a dive into the county’s books from 2021 through 2024 to calculate the associated figures. McArthur stressed that he did not name any of the particular establishments that have delinquent room tax late fees because they were not contacted by his office to confirm or discuss the audit numbers.

“This is not a forensics audit,” McArthur told commissioners on June 17. “This is just a start, saying here is where the numbers are… It’s not to hide things, it’s just the process that we go through… I’m sure this is not the tremendous amount of detail everybody expected but there’s still a ways to go with this.”

Over the course of 2021, there were $3,073 in unpaid late fees in the towns McArthur reviewed, including Amargosa Valley, Beatty, Gabbs, Manhattan, Pahrump and Tonopah. That amount rose to $5,743 in 2022. The amount of unpaid late fees then spiked to $33,264 in 2023 and a further $44,675 in 2024. A vast majority of the unpaid fees were found to have originated in the town of Tonopah, where more than $70,000 went unassessed in the audit period. The total delinquent room tax late fees came to $86,755.

“To add some additional information that’s not on here… just to give you an idea, I’m going to go to what I’d call ‘occurrence’. How many times did this happen? So, in total for the 2021 year, there were 34 occurrences. In 2022 there were 33, in 2023 there were 81 and in 2024 there were 115,” McArthur noted.

As to exactly how the situation came about, there were many theories, with commissioner Debra Strickland labeling it a “procedural problem.”

Commissioner Bruce Jabbour seemed to agree, asserting that he has been frustrated by the matter since the time of former Nye County Treasurer John Prudhont.

“If we go back four years when treasurer John Prudhont… instructed a letter to go out to the (lodging) merchants and I received many, many calls from angry and upset merchants that were told they were late (with their payments) due to the Nevada Revised Statute of when their payments were due.

“I asked him again, when do you consider the payment and worksheet, the room tax sheet, late? And his answer was, ‘as soon as my deputy treasurer inputs it into the system is when we accepted as being received.’ And my response was, sorry that’s not a good answer, that’s incorrect. Why would we be any different than the IRS? For example, if it’s postmarked the 15th, it’s accepted, regardless of when they process that mail. But he disagreed.”

Jabbour asserted that he did not feel that the lodging businesses should be held responsible if their payments are posted by the due date and simply not processed until days later. However, he did say he was in full support of an investigation.

“I am stunned that we’re sitting here,” Nye County Commission Chair Ron Boskovich asserted. “I want a full investigation, I want to know who did this, who authorized it and whether or not disciplinary action has been taken against the person who has done this.”

Boskovich said he was most troubled by the fact that most of the unpaid fees are from Nye County District 1 area and intimated that he believed Jabbour to have been partially at fault but Kunzi cautioned both board and public against presumption.

“This is the first step in this process,” Kunzi stated. “This is something that I will take on. I think it is important that we do a full and complete investigation of this… There is a lot here that we have to dig into and we will do that… It is something we have to take seriously. And what I want to say is, let’s please not jump to conclusions about who is responsible for what. We don’t know and that’s why we need to do an investigation.”

Commissioner John Koenig interjected, “The process sucks. When the processes are bad, things like this happen, whether people want them to or not… please let us know what you find.”

“I will come back with a full and complete report for this board,” Kunzi said.

Contact reporter Robin Hebrock at rhebrock@pvtimes.com