Borgata Casino Set To Appeal Tax Assessments

The Borgata Casino Hotel & Spa in Atlantic City has won a major victory in its fight against the city after a judge ruled that it can appeal its property tax assessments for the years 2011 through 2014.

In 2014, the casino and the city agreed on a settlement of $88.2 million to end Borgata’s case against Atlantic city which alleged that the city’s tax authorities had repeatedly overvalued its property.

The city however defaulted on the payment of the settlement amount which had to be done by December 2014, prompting the casino to approach the court.

State Superior Court Judge Julio Mendez declared on April 4 that because of this breach, the Borgata casino could approach the state tax court to pursue its pending claims. The casino has already received judgment from the state tax courts favoring it on cases involving tax refund for the preceding years 2009 and 2010.

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The city’s tax assessor assessed the Borgata property to be $2 billion in the years 2009 and 2010. A judge in the state tax court however reduced it drastically to $880 million and $870 million respectively, necessitating a refund of $62 million. An appeal by the city was overturned as the courts endorsed the judgment and the Supreme Court declined to review the case on further appeal.

The city failed to pay this refund amount of $62 million in December, resulting in the casino suing it for the outstanding payments. The Borgata recently withheld its February tax payment of $7.5 million saying it will continue to not pay its taxes until it is manages to offset the amount due to it. After the recent ruling, the casino now has another option to pursue the recovery of more money from the city due to a state law called the Freeze Act.

The Freeze Act allows a tax payer to apply a court revalued property assessment for a particular year for two subsequent years as well.

This implies that the Borgata casino can apply the valuation it received for 2010 for the next two years, 2011 and 2012. If the casino opts to use this law, it will most likely result in Atlantic City having to pay additional tax refunds for these years as well. The close to bankrupt Atlantic City had already appealed against the casino using the Freeze Act in its ongoing case against Borgata.