An ongoing legal battle in New Jersey’s appeals court could result in the Atlantic City gaming industry repaying $55m in casino revenue tax. The court has to decide whether the state owes Atlantic County millions more in revenue from the city’s gaming industry. The legal dispute began after Liberty & Prosperity 1776 Inc., a conservative nonprofit organization, sued the state and claimed that New Jersey’s constitution prohibits preferential tax treatment.
Depending on the outcome, Atlantic County and the local school district could share at least $55m in local funding. The state won a “temporary reprieve” after being granted a motion for indefinite pay by the Superior Court of New Jersey Appellate Division. This ruling postponed the lower court’s decision. It also preserved the 2021 law that slashed how much Atlantic City casinos pay in lieu of property taxes.
To add, the gaming industry’s reduction in tax payments allowed for a $55m reduction in 2021. However, should the court uphold the previous ruling, Atlantic City’s industry would need to return those funds. Atlantic County Superior Court Judge Michael Blee threw out the amended Pilot last August. He also issued a written response to the state’s claims of “financial peril” in court.
In his statement, Judge Blee said, “There is no evidence to suggest casinos could not meet their Pilot obligations under the Original Act.” He also noted that the legislation was advanced “to aid what was actually a resurging industry.”
The legal fight over casino taxation in New Jersey highlights the ongoing tensions between state authorities and local jurisdictions over tax revenues. The outcome of this case could have far-reaching implications for the Atlantic City gaming industry. On top of this, it would impact local government budgets and the wider economic landscape in New Jersey.
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