Because of a mistake by Washoe County officials, the city of Sparks has been shorted about $368,000 in tax revenue from casinos since 2009, or about $52,000 per year over a seven-year period, county officials have acknowledged.
The error was disclosed last week when county commissioners reviewed a report on the matter from an independent auditing company that verified the under-collection of gaming taxes that are distributed to Sparks and other local government entities by the county.
The county’s budget office discovered the mistake when it noticed a sharp decline in gaming tax revenues, beginning in fiscal year 2009, which could not be explained by the recession that was occurring at the time, county officials said.
Casinos paid a fraction of what they owed in the gaming taxes, which are calculated based on a complex formula that state legislators approved in 1991.
The error, officials said in a report, stemmed from a “miscalculation of the correct formula.”
In total, about $4.8 million should have been collected but wasn’t because of the miscalculation. The yearly lost revenue for the city of Sparks ranges from about $38,000 in 2009 to nearly $69,000 in 2015, an auditing report shows. The city of Reno missed out on an average of about $100,000 per year, while the average annual loss to the county was about $460,000.
The county hired an auditing firm that confirmed the error and made recommendations designed to prevent the mistake from happening again, County Manager John Slaughter said in a statement.
Officials said the correct tax amount will be billed in the upcoming fiscal year, which starts July 1.
In the meantime, county leaders are trying to determine if they can retroactively collect the taxes that should have been paid. County commissioners will consider the issue at a future meeting.