An Indiana Tax Court decision reported here in the Indiana Law Blog on Tuesday, April 20th (it is the last in the list), Aztar Indiana Gaming Corporation v. Indiana Department of State Revenue (4/19/04 IndTaxCt), could "force the state's 10 casinos to pay an additional $200 million in taxes, industry officials said," as reported in this AP story today. More:
The tax court ruled this week that Aztar Corp., which operates Evansville's riverboat, was not entitled to deduct wagering taxes from its state income tax bill.A longer story is available here, from the Evansville Courier&Press (intrusive registration required). Other reports may be found here, from BusinessWire.com, which reports:The state's other gaming companies have claimed the same deduction, said Mike Smith, executive director of the Indiana Casino Association.
The ruling would force Aztar to pay an additional $17.3 million in state taxes covering the years 1995 through 2004.
Aztar officials said they intend to appeal Tuesday's ruling. It could ask the state Tax Court to review the case again or ask the Indiana Supreme Court to review it, Smith said. However, if the ruling stands, other gaming companies also would have to pay additional taxes, he said.
On April 19, 2004, the Indiana Tax Court ruled in the case of Aztar Indiana Gaming Corporation v. Indiana Department of State Revenue that gaming taxes paid to the state of Indiana based on casino revenues are not deductible for the purpose of Indiana corporate income tax. The company understands that the affected party intends to seek judicial review of the decision in Indiana courts.and here, from PR Newswire's "Aztar Reports First-Quarter 2004 Results," reporting:The company's preliminary estimate is that the decision, if upheld, could have a cumulative negative impact on net income, through the first quarter of 2004, of up to $9 million (after the federal income tax benefit and before any penalties or interest). Once the company completes a more detailed analysis of the financial impact of the court decision, it will report its estimate in a press release and on Form 10-Q.
Indiana Tax Court Ruling The Indiana Tax Court has recently ruled against Aztar in the company's challenge to an assessment for additional Indiana state income tax. The company had challenged the Indiana Department of Revenue's position that gaming taxes paid to the state based on casino revenues are not deductible for Indiana income tax purposes. The company estimates that it will be obligated to pay approximately $17.3 million to cover assessments of taxes and interest from 1996 through the end of the first quarter of 2004. This amount would then be deductible for federal income tax purposes, resulting in net cash and net income effects of approximately $11.3 million. Accordingly, income taxes in the quarter have been increased by $11.3 million, equivalent to 31 cents per share.Posted by Marcia Oddi at April 22, 2004 08:54 AMGoing forward, the company estimates that Indiana state income taxes, net of the federal benefit, will increase by approximately $1.6 million or four cents per share per annum.