he ‘Freeze Act’ states that when taxpayers appeal the estimated value of their property and obtain a judgement in their favor which reduces the estimate, they are then eligible to request the tax court to use the same estimate to the previous two years as well.
The Borgata casino had filed a lawsuit against the city stating that city officials overvalued its property deliberately in order to get the casino to pay a higher property tax
This means that the $880 million assessment for 2010 can now be applied to 2011 and 2012 which means that Atlantic City will have to pay the Borgata a much larger sum of money.
The city has already filed an appeal against the Freeze Act in December 2015 and the Borgata contested that appeal by terming the appeal as absurd and stating that this was yet another attempt by the city to escape payments to the Borgata casino.
The Borgata casino has decided to stop paying the city its first quarterly tax payment of 2016 which is estimated to be around $7.5 million. The casino states that it will continue to withhold its quarterly tax payments until it clears the $62 million debt that the city owes it.
The city’s biggest debtor right is now is the Borgata Casino Hotel & Spa, who is also the city’s biggest employer and highest taxpayer.
The Borgata casino had filed a lawsuit against the city stating that city officials overvalued its property deliberately in order to get the casino to pay a higher property tax. The tax assessor had valued the casino property in 2009 and 2010 to be around $2.2 billion but that estimate was overturned in 2013 after a 3 week bench trial that caused the tax court judge to slash that estimate by more than fifty percent and rated the property value at only $880 million.
Atlantic City decided to appeal that ruling but it was upheld and the Supreme Court decided not to review the case. The city decided to settle with the Borgata Casino in 2014 for $88.2 million. However Atlantic City’s finances have been in poor shape for a number of years and in December 2014, the city defaulted on its payment of $62 million to the Borgata and the casino filed yet another case with the state tax court to get a formal judgement for recovering the extra property taxes it paid.