Pennsylvania casino facing court dispute over taxes

The state Department of Revenue previously conducted an audit of the casino’s records from 2005 through 2008, determining the casino owed $1.2 million in a sales and use tax — more than the $869,241 the casino reported. As a result, the department charged the casino $440,076, including interest and under reporting penalties.

The casino, however, contested the findings and eventually appealed to the Commonwealth Court of Pennsylvania.

The largest amount in question, $247,891 plus interest, involved a May 2005 contract with Teleview Racing Patrol Inc. to install equipment and produce the casino’s live races, as well as to simulcast races from other venues, according to court documents.

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The casino maintained those services are not taxable, while the department maintained they should be because they were not itemized apart from items that were subject to the sales and use tax

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In their ruling Monday, judges P. Kevin Brobson and Anne E. Covey, along with Senior Judge Dan Pellegrini, found that Teleview’s services would have been taxable had they been performed at its own facilities, and therefore the job remained taxable when it was done at the casino’s location.

The judges upheld the board’s assessments of the Teleview contract and on another agreement with IGT related to the operation of the casino’s poker machines. They did, however, order the board to recalculate the nearly $3,000 sales and use tax assessed for a contract the casino had with MRI Contract Staffing to hire its staff prior to opening in November 2006, which the state conceded should not have been assessed.