ILNews

Court sides with racinos in tax dispute with state

Back to TopCommentsE-mailPrintBookmark and Share

A federal bankruptcy court has sided with two Indiana racinos in a dispute over their tax burdens, a ruling that could reduce the total amount they pay into state coffers by as much as $30 million per year.

In his ruling Wednesday in U.S. bankruptcy court in Delaware, Judge Brendan Linehan Shannon agreed with Indiana Live’s attorneys that the state is unfairly taxing the Shelbyville racetrack and casino on money it doesn’t get to keep. Hoosier Park, the state’s other racino in Anderson that recently emerged from bankruptcy, joined in the case in August and also will reap the benefit of the ruling.

Indiana Live, which is in the midst of Chapter 11 bankruptcy reorganization, appealed to the court in late July to consider whether the Indiana Department of Revenue is correctly interpreting state tax law.

The racinos have to set aside 15 percent of their revenue in horse-industry trust accounts that go toward purse money and care for older horses. Some of the money also goes toward tobacco cessation and, if it exceeds a state-mandated cap, a portion goes back to the state’s general fund. The racinos have been paying taxes on that portion of their revenue — a policy Indiana Live contends is unfair.

In a 27-page ruling, Shannon argued that Indiana Live is not subject to taxation on that 15 percent because the racino is a “mere conduit” and does not control the money.

“The debtor merely collects the funds and passes them along, and thus they are not included in the debtor’s income,” Shannon wrote. “Because the Graduated Tax is measured by the debtor’s income, the [15 percent] cannot be included in that tax.”

In its initial appeal to the court, Indiana Live attorneys projected that it could save it about $15 million annually in taxes, a figure that would be doubled if applied to both racinos.

“We are pleased with the court’s decision and are gratified that the correct legal result was reached,” David Suess, a Bose, McKinney & Evans attorney representing Indiana Live, wrote in an email.

It’s not clear whether the state will appeal the decision. An Indiana Department of Revenue spokesman said staffers would review the ruling Thursday.
 

This story originally ran in the Oct. 27, 2011, IBJ Daily, a sister publication to Indiana Lawyer.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Video pen? Nice work, "JW"! Let this be a lesson and a caution to all disgruntled ex-spouses (or soon-to-be ex-spouses) . . . you may think that altercation is going to get you some satisfaction . . . it will not.

  2. First comment on this thread is a fitting final comment on this thread, as that the MCBA never answered Duncan's fine question, and now even Eric Holder agrees that the MCBA was in material error as to the facts: "I don't get it" from Duncan December 1, 2014 5:10 PM "The Grand Jury met for 25 days and heard 70 hours of testimony according to this article and they made a decision that no crime occurred. On what basis does the MCBA conclude that their decision was "unjust"? What special knowledge or evidence does the MCBA have that the Grand Jury hearing this matter was unaware of? The system that we as lawyers are sworn to uphold made a decision that there was insufficient proof that officer committed a crime. How can any of us say we know better what was right than the jury that actually heard all of the the evidence in this case."

  3. wow is this a bunch of bs! i know the facts!

  4. MCBA .... time for a new release about your entire membership (or is it just the alter ego) being "saddened and disappointed" in the failure to lynch a police officer protecting himself in the line of duty. But this time against Eric Holder and the Federal Bureau of Investigation: "WASHINGTON — Justice Department lawyers will recommend that no civil rights charges be brought against the police officer who fatally shot an unarmed teenager in Ferguson, Mo., after an F.B.I. investigation found no evidence to support charges, law enforcement officials said Wednesday." http://www.nytimes.com/2015/01/22/us/justice-department-ferguson-civil-rights-darren-wilson.html?ref=us&_r=0

  5. Dr wail asfour lives 3 hours from the hospital,where if he gets an emergency at least he needs three hours,while even if he is on call he should be in a location where it gives him max 10 minutes to be beside the patient,they get paid double on their on call days ,where look how they handle it,so if the death of the patient occurs on weekend and these doctors still repeat same pattern such issue should be raised,they should be closer to the patient.on other hand if all the death occured on the absence of the Dr and the nurses handle it,the nurses should get trained how to function appearntly they not that good,if the Dr lives 3 hours far from the hospital on his call days he should sleep in the hospital

ADVERTISEMENT