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New Jersey Governor Proposes Taxes on Casino Comps

`There is no logical reason for allowing a business to give away lodging without tax consequences when, had they given away a tangible property, it would have been subject to a tax,' McGreevey said in his budget book detailing a proposed $23.7 billion state budget.

"Timothy Wilmott, president of the Casino Association of New Jersey, begged to differ.

"`It's a marketing expense, not something we sell,' he said.

"Wilmott, who is Eastern Division president of casino giant Harrah's Entertainment Inc., said McGreevey's tax plan would be costly in the long run. It would make local casinos less competitive against the expected casinos in New York and reduce funds for capital improvements, he said.

"…McGreevey's $33 million tax estimate would represent 3 percent of the industry's estimated $1.1 billion gross operating profit for last year.

"…The casino association, which represents the 12 local casinos, and its chief ally in Trenton, state Sen. William Gormley, R-Atlantic, vowed to fight the tax.

"…Casinos gave away 1.9 million rooms valued at $155.7 million during the first nine months last year, according to the latest Casino Control Commission data. That amounted to 65.6 percent of their rooms, according to a Press of Atlantic City analysis.

"Casinos also gave away 13.7 million meals valued at $171.5 million during that period.

"McGreevey's plan notes that complementary show tickets are also untaxed, but it's unclear whether he wants to tax those, too. Casinos also comped 511,625 patrons to $11.8 million worth of entertainment during that period.

"It's unclear whether McGreevey's plan would assess the regular 6 percent sales tax on comped hotel rooms or the combined sales and city luxury tax of 12 percent.

"…Assemblyman Paul D'Amato, R-2nd, said McGreevey should be looking for ways to help the casino industry, not hurt it…"

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