Court sides with state in sales tax case involving casino, medical center

TRENTON – A casino and a medical center have lost sales tax cases that were before the appellate division.

The court ruled Tuesday in favor of the Division of Taxation and against Atlantic City Showboat Inc. and Our Lady of Lourdes Medical Center Inc. in consolidated cases.

At issue was whether the entities could receive refunds on some of the sales taxes paid for the purchase and delivery of electricity. The court today upheld the state’s tax court decision.

At issue for each entity were sizeable amounts for which they were seeking refunds.

For the period in question, Aug. 1, 2003 through Dec. 31, 2005 Atlantic City Showboat had paid approximately $622,000 and sought a refund of about $391,000.

Our Lady of Lourdes, for the period Aug. 1, 2003 through May 24, 2005, had paid roughly $123,000 and sought about $72,000 in a refund.

The entities had argued that generation and transmission are subject to sales tax but that distribution is not.

The courts have ruled, however, that such distribution charges are utilities services and subject to the tax.

Court sides with state in sales tax case involving casino, medical center