Mohegan Sun Casino Avoids Pennsylvania Tax on Free Hotel Rooms

Downs Racing LP‘s casino in the Poconos doesn’t owe county hotel rental taxes on rooms it comps for high rollers because it receives nothing in return, a Pennsylvania appeals court affirmed Tuesday.

The state statute authorizes localities to impose the tax “on the consideration received by each operator of a hotel within the market area from each transaction of renting a room or rooms to accommodate transients.” The Pennsylvania Commonwealth Court rejected Luzerne County’s theory that the Mohegan Sun Pocono offers the rooms not as gifts but rather as “transactional vehicles designed to induce patron presence and spending.”

“Mohegan ...