|A proposed “comp tax” on complimentary hotel rooms and meals for high rollers in Atlantic City has failed to make it through the New Jersey Senate or Assembly budget committees, much to the relief of Casino executives.|
The proposed legislation would have authorized a 6% sales tax on comps, much to the chagrin of Atlantic City casino executives, who rely on such comps to drum up business and to keep their biggest-spending customers happy.
Casino executives had derided the bill as `crazy’ and their trade group, the Casino Association of New Jersey, had lobbied heavily against the bill. They said free hotel rooms and meals are marketing expenses and should not be subject to a tax that would discourage them from marketing to high rollers.
MGM Mirage had threatened to pull out of a proposed $1.5 billion casino development in Atlantic City because of the tax proposal. Company spokesman Alan Feldman said it is “reassuring” to know that the comp tax has died, saying it wasn't just the cost, but also the nature of the tax that worried his company.
The legislation enacting the comp tax, introduced in both the Senate and Assembly, has not been withdrawn, meaning it could come up before a committee again at any time. However, with the budget process completed, that is now unlikely.