Comp Tax Could Be Costly to AC and NJ

A gubernatorial proposal calling for taxing of casino hotel-room comps could cost Atlantic City a major player if MGM Grand's CEO follows through on a threat to can a planned new casino. "This is one of the crazier tax proposals I have ever seen," John Redmond, CEO of MGM Grand's Resorts, told The Press of Atlantic City. "I am not wild about recommending to our board that we continue to proceed with a major project in Atlantic City in the face of this type of proposal."

The proposal by Governor James E. McGreevey would raise an estimated $33 million in taxes to offset proposed budget losses, according to the The Press. But, it could cost Atlantic City a $1 billion-plus construction project and taxes of $28.7 million on at least $358 million in revenues. That's the average for each of the existing 12 Atlantic City casinos which generated a total of $4.3 billion in revenues in 2001.

The state would also lose an additional $4.5 million in Casino Reinvestment Development Authority levies of 1.25% on a casino's gross revenues. In addition, if MGM Grand pulls out, McGreevey's proposal would cancel out at least 3,000 potential jobs and all the resulting income taxes.

Content provided by Business News New Jersey.

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Author: Business News New Jersey