Judge Grants 90-Day Stay on Ruling Discarding Atlantic City Casinos Tax Break

Judge Michael Blee of the New Jersey Superior Court has granted the requested stay on the court decision to throw away a major tax break for Atlantic City casinos introduced by an amendment to the PILOT tax program in 2021

Judge Blee Granted 90-Day Stay on His Ruling Cancelling the PILOT Amendment from 2021

The Press of Atlantic City reported that judge Michael Blee has ruled for a stay of 90 days on his court decision that the law amendment allowing for tax relief for Atlantic City casinos is in breach of the New Jersey state’s founding document.

The judge has granted the stay in order for the Appellate Division or the New Jersey Supreme Court to stipulate a decision regarding the dispute during this 90-day-period. There is a possibility for an extension in case the courts delay their rulings.

Judge Blee has highlighted that there are good grounds for granting a stay as the case involves a dispute over the state’s constitution.

The state of New Jersey has requested that the case be taken directly to the Supreme Court as anyone who loses in the lower court will definitely appeal the decision. This way both parties will be able to save on legal costs and a final decision will be reached more swiftly.

At the end of September, the New Jersey attorney general filed a request for a stay on judge Blee’s decision arguing that there will be disruption to the state’s finances if the tax break is thrown away immediately.

However, judge Blee pointed out that the argument by the state’s lawyers that New Jersey’s finances will be disrupted if the state is not granted is in contradiction with the fact that the cancellation of the tax break for the casinos will bring more revenue to state coffers.

What Does the PILOT Amendment Entail?

The payments-in-lieu-of-taxes (PILOT) program, which was introduced in 2016, is a taxation system that bases the Atlantic Casino’s property tax on a percentage of the casinos’ winnings from the previous financial year.

However, in 2021 due to complaints from the gambling industry that they are experiencing difficulties as a result of the pandemic, an amendment to the PILOT program was quickly passed by Governor Phil Murphy.

This amendment effectively introduced a tax break for Atlantic City casinos by removing the winnings from online gambling from the calculations for the PILOT tax.

A New Jersey NGO, Liberty and Prosperity 1776, quickly reacted to this new legislation by filing a lawsuit aiming to cancel the unjust tax relief. As a result, on August 29 judge Blee ruled that the amendment is against the New Jersey constitution and discarded it.