Carl Icahn is seeking millions in property tax refunds from the government of Atlantic City which could further harm the once booming gambling town.
Casinos operating in the United States have to pay taxes based on individual laws set in their given state. For the most part, the gaming venues pay taxes based on a property assessment. The amount that the venue must pay is based on the overall assessment of the property due to certain factors such as value. In Atlantic City, casinos have disputed their tax assessment with the city and actually won which lead to Atlantic City being short on cash. One example of this was the Borgata casino, a venue that was due several million after the courts found their value was less than what was assessed. Now it seems that billionaire casino owner Carl Icahn is trying to gain millions based on property values for the Trump Taj Mahal as well as the Tropicana.
Carl Icahn has filed a motion within the state tax court to see money repaid due to the tax assessment of not only the Trump Taj Mahal but also the Tropicana, according to a report by the Press of Atlantic City. Icahn has asked for the property assessments of this year to be reviewed for the Taj and Trump Plaza, actually going back as far as 2014. If Icahn is able to win his case, he would take millions from the already cash-strapped city.
As far as the Tropicana is concerned, Icahn seeks to have the values from 2015 to 2016 assessed. Last year, the companies owned by Icahn paid over $32.7 million for the Tropicana and Trump Taj Mahal by way of taxes. The Taj cost $8.7 million while the Tropicana came in at $22.4 million. Trump Plaza paid $1.5 million in taxes, based on information provided by the City Clerk. Each of the properties have seen a reduction of their assessments since 2014, with both the Plaza and the Taj seeing dramatic drops in value.
Icahn is not open to commenting on the tax assessment case so we are unclear as to how much he is actually trying to receive from Atlantic City. However, in the past, venues have been paid in the hundreds of millions. Reportedly, Icahn and Atlantic City are negotiating the money issue currently.
Working on the case is Jeffrey Chiesa, the state overseer. Chiesa was able to work magic with the Borgata deal to see Atlantic City pay only $72 million in tax refunds instead of more than double that amount. Governor Chris Christie would like to see a similar deal struck with Icahn on the matter as Atlantic City is running low on funds.
According to the Press of Atlantic City, such issues could be avoided if the state had approved laws that prevents gaming venues from appealing tax assessments. Back in 2014, the legislators of New Jersey introduced legislation for the PILOT bill that would have stopped the appeals of the Tropicana in 2015 and 2016. However, the city decided to go back and forth with the measure so the bill was not enacted until last year and does not go in to effect until this year.
It will be interesting to see if Icahn will be able to receive payment for his venues based on the value assessment. Will he take the last of the monies of Atlantic City? Or will a deal be struck to help the gambling town stay on their last legs? We should know the answer in the next few weeks as deliberations continue between the owner and the overseer.