Billions of Dollars in Casino Property Sales Go Untaxed
While the Casino Industry continues to generate historic record revenue, it also is escaping millions of dollars in transfer tax. In 2007, not long before Las Vegas’ frenzied real estate market imploded, Nevada lawmakers approved a seemingly minor tweak to a tax law. The change ensured property owners could use a range of entities when shifting real estate to an affiliate to exempt these transactions from transfer taxes. Since then, the exemption has been cited in several lucrative deals on or near the Strip. Overall, at least two dozen or so transactions in the Las Vegas area, totaling $27.5 billion, have closed since 2007 without any publicly reported real estate transfer taxes, the Review-Journal found. Each of these deals were between separate buyers and sellers and involved hotel-casinos, malls and other properties mostly on or near Las Vegas’ famed casino corridor. Such deals include the $4.2 billion cash sale of Bellagio’s real estate; the $3.89 billion sale of the Aria and Vdara’s real estate; and the $1.1 billion sale of luxury mall Shops at Crystals. Collectively, those three sales alone could have generated nearly $47 million in transfer tax revenue. Casino giant MGM Resorts International, which sold the Bellagio’s real estate and several other properties said in a statement that this deal structure “is typical among real estate transactions involving businesses of all sizes, across a wide variety of industries." There are transactions that involve real estate changing hands that have managed to escape the transfer tax on the real estate but these usually involved transfer through a sale of the corporation owning the property, or transfer to a subsidiary. Usually you don’t even know about these transactions. During the 2008 financial crisis. A thing called MERS was created by the banking industry to help the banks avoid transfer tax.
