Playing Solomon, the Nevada Supreme Court split the baby this week in the case in which Harrah’s demanded a refund of use taxes paid on its four corporate jets.
The high court ruled the casino corporation was entitled to a refund on taxes paid for two of the jets but not the other two.
The difference, according to the opinion issued this week, was whether the jets were first used in interstate commerce outside Nevada or used in a flight that either started or ended in Nevada. Under state tax law, a plane first used in a flight completely outside the state is not subject to the use tax.
The two jets purchased in Little Rock, Ark., the court ruled, were not first used in interstate commerce because their first flights ended in Las Vegas.
“Accordingly, the presumption of nontaxability does not apply to these two planes,” the ruling states.
But, the court ruled, the two aircraft purchased in Portland, Ore., were first used in flights that “occurred wholly outside the state of Nevada.” One was flown from Portland to California and the other to Little Rock.