Friday, April 26, 2002
In a letter to Governor James E. McGreevey, County Executive Dennis Levinson expressed his strong opposition to the Governor's controversial proposal to impose a 6% sales tax on the value of complimentary hotel rooms and meals the Atlantic City casinos provide to their patrons.
"The proposed tax on comps reflects a lack of understanding regarding the economics of the casino industry," Levinson said. "Free meals and hotel rooms are a marketing tool in the casino industry. Imposing a new tax on comps would have a devastating effect on New Jersey's casino industry and ultimately hurt senior citizens and disabled people who benefit the most from the existing tax on casinos."
Levinson stated that he had believed the Governor understood that a tax on comps was not the right way to go and that the proposal was dead. However, on Tuesday, State Treasurer John E. McCormac, indicated that the idea of taxing comps was still on the table.
"Although I understand the pressure the Governor is under to balance the budget, taxing comps is a bad idea and it will have serious consequences that do more harm than good. It will discourage new casino investment, discourage new ratables, and decrease jobs - both construction jobs and permanent jobs. MGM Mirage has already stated that a tax on comps would cause them to withdraw their plans to build a new multi-million dollar casino in Atlantic City," Levinson said.
Levinson added that the Governor's timing could not be worse since competition from other gaming jurisdictions outside New Jersey is expected to increase in the coming years. "A tax on comps will not generate the level of revenue the state anticipates since casinos will be more reluctant to provide comps to some customers or place a lower value on the complimentary item so that the sales tax is lower. More importantly, it sends the wrong message to the business and corporate community that in New Jersey we are never safe from unanticipated or increased taxation. It is clearly not the type of message we want to send. Even Jim Florio recognized that taxing casino comps would have disastrous consequences," Levinson said.
For more information, please contact Howard Kyle, Chief of Staff, at (609) 343-2368.