Greenetrack in the red: Alabama issues $75 million tax bill

http://www.westport-news.com/news/article/Ala-seeks-75-million-in-taxes-from-Greenetrack-1773664.php

Ala. seeks $75 million in taxes from Greenetrack
By Phillip Rawls, Associated Press - August 8, 2011

MONTGOMERY, Ala. (AP) — Greenetrack is fighting a $75 million tax bill from the state and says in court papers the assessment far exceeds the track's assets.

Greenetrack's lawyers filed an appeal in Greene County Circuit Court over the state Revenue Department's attempt to collect $61.8 million in taxes and $13.7 million in interest for sales taxes not paid on electronic bingo proceeds from 2004 through 2008.

Circuit Judge Eddie Hardaway has scheduled a status conference with attorneys on Aug. 25.

"We intend to fight the assessment," track attorney John Bolton of Montgomery said Monday.

Carla Snellgrove, spokeswoman for the Revenue Department, said the department doesn't comment on pending litigation.

The tax case involves the 850 electronic bingo machines operated by the track prior to a raid by then-Gov. Bob Riley's gambling task force in July 2010. Riley's task force contended the machines were illegal slots and seized them.

The track's attorneys argue in court papers that state law doesn't allow sales taxes to be collected on gross receipts from electronic bingo machines. They also argue that the track is not liable because charitable organizations had the licenses to operate the machines and paid Greenetrack for its property, use of the machines and staff.

Greenetrack was once one of the nation's most popular dog tracks. But full-fledged casinos in Mississippi and the opening of a dog track in Birmingham cut its business to the point it discontinued live racing and relied on simulcast races and electronic bingo to bring business to the rural track 85 miles southwest of Birmingham.

In court filings, the track's accountants list its total assets at $15.75 million — or about one-fifth of what the state government says it owes.

Bolton said that the tax dispute resulted from an audit done by the state Revenue Department, and that he is unaware of any audit being conducted for the period from 2009 through the closure of the machines.

A separate court hearing is scheduled Tuesday on a new type of electronic bingo machine that Greenetrack opened in March.

State police seized the new machines May 31 using a search warrant obtained by state Attorney General Luther Strange's office, which contended the machines were illegal slots. The judge who issued the search warrant, Special Circuit Judge Houston Brown, ruled last Wednesday that the warrant was based on misleading information and that Strange must return the machines.

The judge will hear a request from Strange on Tuesday to put the order on hold while the attorney general appeals to the Alabama Supreme Court.