Supreme Court hears Casino Aztar tax case

JEFFERSON CITY, Mo. -- The Missouri Supreme Court on Wednesday tackled the question of whether a casino is really a casino when it comes to property taxes.

At stake in the case is at least $2.5 million in disputed tax revenue from the 1999 through 2003 tax years that Pemiscot County Assessor Donna Snider says Caruthersville-based Casino Aztar owes the county. The money has been held in escrow while the case has progressed through the court system.

Snider had assessed the casino's property based on its replacement cost, minus depreciation for age. However, the Missouri State Tax Commission said Snider failed to consider that the value of Aztar's property is dependent on having a state license to operate a casino.

Therefore, the commission reasoned, the potential resale value of the property is significantly lower than Snider calculated because a prospective buyer has no guarantee of receiving a license to operate a casino.

Judge Laura Denvir Stith seemed to have difficulty accepting that line of reasoning in addressing Aztar attorney Ed Reeves.

"You are saying it is a casino, but you can't tax it if it is a casino," Stith said skeptically.

If the tax commission is correct, Stith said, hospitals, radio stations and other facilities owned by businesses subject to licensing requirements could not be taxed based on the purpose for which they were designed.

Reeves said he couldn't speak to situations involving other licensed businesses but noted the Missouri Gaming Commission keeps tight control on casino licenses and that obtaining one isn't easy.

"You can't transfer them. You can't buy them. You can't sell them," Reeves said. "It is entirely up to the gaming commission."

At present there are only 13 licensed casinos in Missouri. The last license was issued in 2001.

Thomas Rynard, Snider's attorney, said all sides agree the facility's "highest, best use" is as a casino and that Snider was correct in setting its tax value as such. The tax commission's reasoning in this case, Rynard argued, could be used to lower assessed values on other types of property.

"Next year, if the commission's decision is upheld, Aztar and every other casino in the state is going to ask that their slot machines be assessed as gumball machines," Rynard said.

Just as a license from the Missouri Gaming Commission is required to operate a casino, licenses are also needed to own slot machines.

Under questioning from Stith, Reeves acknowledged the slot machine scenario is possible, though not probable.

"You could theoretically extend that argument to slot machines," Reeves said. "I don't think anybody would."

In the years since the tax commission originally sided with Aztar, both a circuit court judge and the Missouri Court of Appeals Southern District have affirmed the commission's decision.

The Supreme Court will issue an opinion at a later date.

The case is Donna Snider, et al., v. Casino Aztar, et al.

mpowers@semissourian.com

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