PILOT tax law

Atlantic City: Hearing over NJ state's motion for casino tax break ruling reconsideration set for April 25

United States
Reading time 1:59 min

A hearing date has been set on the State of New Jersey’s motion for reconsideration of a judge’s Feb. 25 decision that the much-discussed PILOT tax proposal is in violation of a 2018 consent order. The hearing has now been scheduled for April 25, according to Atlantic/Cape Vicinage Civil Division Manager George Coan.

“The motion had initially been returnable this Friday, April 1,” Coan told The Press of Atlantic City, “but at the request of counsel the motion was adjourned and is now set to be heard on April 25.”

The new development builds upon the ongoing conflict between Atlantic County and the State of New Jersey over the amended PILOT law. The controversial legislation gives tax relief to Atlantic City’s casinos by removing sports and online gaming revenues from the calculation of their payments in lieu of taxes.

Atlantic County sued the state to stop the proposal from taking effect, shortly after New Jersey Gov. Phil Murphy signed it into law in December. County officials argue that amendments to the law would provide Atlantic County with $15 million to $26 million less through 2026 than under the original law.

New Jersey Gov. Phil Murphy

According to Superior Court Judge Joseph Marczyk’s ruling on February 25, the State of New Jersey violated the terms of a consent order between the state and Atlantic County. In 2018, the lawsuit over the original 2016 PILOT bill was settled for specific percentages based on the original law details.

Under the consent order, Atlantic County was set to earn about 13% of PILOT funds calculated under the original law, which the county interpreted as including online sports betting and internet gaming under GGR. By now leaving out these two profitable verticals, Atlantic County claims the state dishonored their agreement.

State representatives first announced their intentions to file a motion for reconsideration last month, which Atlantic County Executive Dennis Levinson described as “a tactic to delay the process.”

In his order, Judge Marczyk did not prohibit the state from implementing the new PILOT law “except to the extent they are subject to sanctions and/or damages” to be determined in a hearing before Judge Michael J. Blee, who took over after Marczyk moved in March to the Appellate Division.

In a March hearing, lawyer for the state John Lloyd argued the Legislature had the right to define GGR any way it saw fit, at any time, in spite of the consent agreement, further reports The Press of Atlantic City. He also argued that nowhere in the original law is the definition given for GGR, other than to say it is determined by the state Division of Gaming Enforcement.

County attorney Ron Riccio fired back, arguing the consent order was based on a mutual understanding that all gaming revenues, including iGaming and sports gaming, would be included in PILOT calculations, much like they had been included for the first years of the law.

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