A New Jersey Superior Court judge has ruled that tax relief in relation to property tax for Atlantic City casinos is against the state’s constitution. The amendment to the law of New Jersey, which was passed in haste by Governor Phil Murphy, was in violation of the New Jersey constitution. The amendment reduced the yearly property tax paid by Atlantic City casinos.
The New Jersey Superior Court Atlantic County Law Division ruled on August 29 that tax relief for casinos in Atlantic City in respect to property taxes is in violation of the state constitution.
Thanks to the PILOT Amendment, Atlantic City Casinos got a $55 million tax break
According to ProPublica, Judge Michael Blee has doubled down on the tax reliefs for Atlantic City casinos.
The amendment to the law of New Jersey, which was passed in haste by Governor Phil Murphy, was found to be in violation of the New Jersey constitution.
The legislation introduced by the governor made a change to the taxation system. Atlantic City casinos have been required to pay a percentage of their total revenue from gaming activities from the previous year instead of property tax.
When the tax break amendment was passed in 2021, the gaming industry was complaining of the difficulties it was experiencing as a result of the COVID-19 pandemic. Four of the state’s nine casinos are in danger of being closed. The casino industry succeeded in getting rid of the revenue from online gambling activities from the PILOT contribution calculation.
The yearly property tax paid by the Atlantic City casinos was reduced by $55 million, meaning that Atlantic City schools and communities were deprived of this amount.
The war on the amendment was instigated by the NGOs Liberty and Prosperity
Atlantic City casinos were not allowed to get away with this tax break easily. Liberty and Prosperity 1776, a conservative organization, filed a lawsuit against the amendment because it is against the state constitution, which prohibits preferential taxes. The judge Blee decided that the tax break should be thrown out.
The legislative amendment, as determined by the court, was made in favor of the state’s casinos rather than for the benefit of the general people, as claimed by Governor Murphy on behalf of the gambling sector. The introduction of the tax break is in violation of New Jersey’s founding document, which explicitly prohibits preferential treatment when it comes to tax payments.
The financial results of the Atlantic City casino industry seem to correspond with the claims of the troubled industry. Atlantic City casinos posted a gross operating revenue of $767 million in 2011. This year’s results seem to be the same as last year. In comparison to the same period last year, the net revenue for the second quarter of 2022, which came from gambling activities, increased by 14.1%. The results for the first six months of the year were the same as in the previous year, with net revenue of 1.5 billion, which was an increase of 19.9%.