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New Jersey Governor Approves Tax Relief for Casinos 

Posted on Dec. 23, 2021

New Jersey Gov. Phil Murphy (D) has signed legislation designed to provide COVID-19 tax relief for the casino industry, including a bill that provides a gross revenues tax credit and a casino license fee deduction.

S. 3994/A.5943 (signed into law as Chapter 314) and S. 4007/A. 5587 (signed into law as Chapter 315) were among bills signed by the governor December 21. Under S. 3994, casino licensees can take a temporary credit against their gross revenue tax liability over a 12-month period. The amount of the credit would depend on a casino's gross revenue from January 1, 2021, through April 30, 2021, compared with its gross revenue during January and February 2020 plus March and April 2019, according to the bill. 

The bill also modifies an existing deduction casino licensees can take for promotional gaming credits in excess of $90 million by suspending that threshold for the credits for 24 months. "Essentially, $180 million in promotional gaming credits would no longer be taxable" under the bill, according to a December 10 fiscal note. The bill is expected to reduce state revenues by about $34.4 million over two years, according to the note.

Sponsored by Senate President Stephen Sweeney (D), Assembly Majority Leader Louis Greenwald (D), Assembly member Vincent Mazzeo (D), and other Democrats, the bill passed the Assembly December 20 by a vote of 67 to 2, after clearing the Senate the same day on a 36–0 vote.

S. 4007, also sponsored by Sweeney and Greenwald, is more controversial. It changes the calculation of casinos’ payments in lieu of property taxes (PILOT) each year under the Casino Property Tax Stabilization Act until 2026, reducing the casinos' payments.

In a December 22 statement on the signing of the bill, Sweeney said the legislation will help prevent casino closures and save jobs. "Like the original PILOT law that averted casino bankruptcies, these new laws were needed to prevent the potential closures of two to four casinos in the wake of two rocky years of reduced tourism and convention cancellations due to Covid-19 restrictions and fears,” he said. “We have had tremendous investment in Atlantic City by the casino industry in recent years that created thousands of additional jobs both in the casinos themselves and in related service industries. We can’t afford to turn back the clock on the progress we have been making."

But Peter Chen of New Jersey Policy Perspective said in a December 20 statement, “Despite booming profits and rapidly expanding sports-betting revenues, state lawmakers gave casinos an early Christmas present of at least $145 million in tax breaks. The casinos’ own profit and revenue data shows nearly $600 million in profit in the first three quarters of 2021 alone. Once again, the house wins." Chen submitted testimony in opposition to the bill earlier this month.

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