NEW CUMBERLAND – A Hancock County judge has asked the sides in a dispute over hotel occupancy tax to resolve the case in mediation.
Hancock Circuit Judge Ronald E. Wilson recently issued a order in a lawsuit against Mountaineer Park, ordering that the casino and the Hancock County Commissioners do their best to come to an agreement on the issues involved in the case.
In his order, Wilson said this issue is of great importance to all citizens of Hancock County.
"The management of Mountaineer Park, the Hancock Count[y] Commissioners and the attorneys involved have the flexibility within this statute and the responsibility to do their best to come to an agreement on the amount of the tax owed, the amount of compensation that is taxable and the amount of the tax that is reasonable and responsible for the benefit of ... the citizens of Hancock County and Mountaineer Park ..." Wilson's order states.
The Hancock County Commission enacted a hotel occupancy tax to impose and collect a 6 percent privilege tax as part of the consideration paid for the occupancy of hotel rooms within the taxing jurisdiction.
The tax was imposed on Mountaineer, according to the order.
Mountaineer argued in the case that the hotel occupancy tax at issue is six percent and that there is no consideration paid for complementary hotel rooms offered to patrons receiving coupons in the mail. Mountaineer argued that 6 percent of nothing is nothing, and no tax should have been due.
"If that were the case, this would have been an easy decision for the court, but of course it isn't the case," Wilson stated. "The path to resolving this case presents more challenging labyrinths that Mountaineer recognizes."
If Mountaineer has the right to have a free room marketing program that does not collect the hotel occupancy tax on 70 percent of its rooms, that program would defeat the purpose of the legislation authorizing the hotel occupancy tax, according to the order.
The problem is further exacerbated because Hancock County only has two hotels subject to the tax: Holiday Inn Express in Newell and Mountaineer in Chester. Mountaineer refuses to collect the 6 percent tax for more than 8,100 hotel rooms each month that are provided free to gaming patrons under the players reward club.
"The incongruity presented by a free room program that would financially benefit patrons of Mountaineer and deny financial benefit to the Commission would defeat the purpose of the legislation," Wilson's order states.
Wilson stated that Mountaineer would benefit from increase revenues and patrons would benefit from the use of the free room and access to gambling devices, however, the loser would be the citizens of Hancock County, who would lose the benefits that come from the passage of the legislation.
The legislation was created to help fund the local Convention and Visitor's Bureau and to promote tourism and the convention and hotel industry; and to provide money to plan, construct, maintain or acquire arenas, auditoriums, civic centers and convention centers, public parks, recreation facilities and promotion of the arts, according to the order.
Hancock County Commission argues that if collected by Mountaineer, the hotel occupancy tax would be approximately $880,000 per year for the years 2008 through 2013.
The lawsuit was initially filed in 2012 by Ralph Fletcher, the sheriff of Hancock County.
In the complaint, Fletcher claimed Mountaineer refused to collect the hotel occupancy tax from customers who received free rooms from the frequent player club.
Fletcher claimed Mountaineer's actions and conduct caused the county to suffer damages.
The court ruled that the plaintiff's motion for summary judgment should be granted.
However, the court still has the damages issues of how much tax should have been collected and remitted over to the plaintiff and how much of the consideration is taxable, since those issues were not before the court in the motions decided in this order.
The plaintiff's attorney, Daniel J. Guida of Guida Law Offices, said the hotel occupancy tax is supposed to be paid by the consumers, but when it isn't collected from the consumers, it is the hotel's responsibility to collect it.
"It comes out to about $4 per room, which I'm sure consumers wouldn't mind paying for," Guida said. "But, Mountaineer refused to collect it."
Guida said the judge order them to mediate it and they are going to try to do that in the next couple of weeks.
Mountaineer was represented by Sharon L. Potter and Alex Macia of Spilman Thomas & Battle PLLC.
Hancock Circuit Court case number: 12-C-182