6 Tips for Shaving Down A Hotel Tax Bill

June 20, 2014 – In The News
Peter M. Sarkos was quoted in "6 Tips for Shaving Down A Hotel Tax Bill." The full article is available in the June 20, 2014 edition of Law360, but a synopsis is provided below.

Hotels struggle to obtain fair tax assessments as a result of their complicated revenue streams, so experts predict tax bills for lodging businesses will rise as the lodging industry booms.

Fox Rothschild litigator, Peter M. Sarkos, who recently helped the Borgata Hotel and Casino in Atlantic City, New Jersey chop down years of tax bills, comments on this prediction: "As soon as the client contacts you, your next phone call should be to retain an expert. Then start the process of getting all the necessary financials."

Acknowledging that New Jersey Tax Court cases can sit idly for years at a time, Sarkos adds: “My attitude is you can't call them enough. If you think there's an opportunity to settle, then you can't call them enough.”

“My experience has been that the preferred method is not to drill down in the weeds when you're just negotiating a settlement. Deal with things in the broader sense and try to reach a number that the parties are happy with,” says Sarkos.

In relation to the settlement flexibility, Sarkos also comments that, "Swallowing the current tax bill in exchange for those reductions can often be in a hotel's best interest. Another option is to take your client's refund as a credit on taxes moving forward, which also keeps the city or municipality from having to pull out money right away."