The casino tax is a percentage of revenue generated by a casino. In the state of Michigan, the casino tax is 18 percent, with 8.1% going to state education aid and 9.9% to the city in which the casino is located. In 2004, the casino tax was lowered to six percent, with 7/12 of the revenue going to the general fund and one-tenth to a new fund to support the state’s agriculture and equine industry. In addition, the casino must charge a minimum of $3 per day for hotel accommodations.
The Mississippi Gaming and Hospitality Association reports that the state received $6 million in casino taxes last year. Of that money, $638 million went to local education. In Gulfport, for example, the school district received $3.9 million of the $26 million in casino tax revenue. The city used that money to add more teachers to its schools, improve the public library, and install indoor physical education rooms. The Mississippi state budget includes a separate fund for education.
Although the top casino tax rate in Illinois is fifty percent, nine states have lower rates. Indiana and Illinois both have top tax rates of forty percent and fifty percent. Illinois has a long history of casino tax changes, as the casino tax was originally flat at 20 percent. Now, the casino tax is a graduated rate. This is the most accurate measure of the casino’s impact on a state’s economy. For more detailed tax information, consult a casino’s tax impact report.
Although the growth of casino tax revenues in Pennsylvania grew, neighboring states opened up racinos and casinos. While Indiana and Ohio saw a sharp decline in casino tax revenues, this was largely a reflection of market saturation and the Great Recession. It is important to note that casino tax revenues in those states are still far below pre-recession levels. Therefore, the state of Pennsylvania has more room for growth in the future. This may be because of a new casino in that state.
Despite the fact that casino taxes are already rising, the new casino tax bill will help casinos recover from the impact of the coronavirus pandemic. While the bill will limit the large increases in payments in lieu of property taxes, casinos will still have to pay more taxes than they did last year. The casinos are expecting to pay up to $15 million in additional taxes next year, while without the casino tax bill, they are facing a 50% tax hike.
In New Jersey, lawmakers are considering a casino tax break proposal. Despite the state’s recent COVID-19 vaccination law, casinos are warning of a dire financial situation in the near future. Gov. Phil Murphy has signed the bill. The casino tax bill will be discussed in Monday’s legislative session. But opponents are arguing that it is unnecessary. If the bill passes, the casinos will see their PILOT payments fall by $55 million next year and by $30 to $60 million annually through 2026.