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Indiana Casinos May Lose Tax Break

INDIANA – As reported by the Evansville Courier & Press: "Indiana's 10 casino operators may have to pay an additional $200 million in state taxes if a tax court ruling against Aztar Corp. holds up, industry officials said Wednesday.

"The Indiana Tax Court has ruled that Aztar, operator of Evansville's riverboat, was not entitled to a tax deduction for wagering taxes it pays to the state each year.

"The ruling, which Aztar officials intend to appeal, would force the gaming company to pay an additional $17.3 million in state taxes covering the years 1995 through 2004.

"But the ruling has larger implications because the state's other gaming companies have been claiming the same deduction, said Mike Smith, executive director of the Indiana Casino Association.

"…Indiana Tax Court Judge Thomas Fisher issued his ruling in the case Tuesday, siding with the state Department of Revenue. In arguing its case, Aztar said it took a deduction for the wagering taxes it pays the state each year because the wagering tax is actually an excise tax and therefore eligible for the deduction.

"However, Fisher agreed with the Department of Revenue, which argued that the wagering tax should be treated as a state income tax. State income tax payments cannot be claimed as a deduction when computing state tax bills.

"…[Smith] said additional taxes would force gaming companies to reconsider their other expenditures, including philanthropic activities. It would also divert money away from improvements the gaming companies could make to their operations…"

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