Penn Casino, COST Ask Indiana Justices to Eye Income Tax Case
In a move that could have significant implications for the gaming industry in Indiana, Penn Casino and the Council on State Taxation (COST) have filed a petition asking the state’s highest court to review a lower court decision regarding the taxation of out-of-state income.
The case stems from a dispute between Penn Casino, a major player in the Indiana gaming market, and the Indiana Department of Revenue. Penn Casino operates several casinos in the state, but also has operations in other states. The issue at hand is whether Indiana can tax the income generated by Penn Casino’s out-of-state operations.
In 2018, the Indiana Tax Court ruled in favor of the Department of Revenue, holding that Indiana could tax all of Penn Casino’s income, both in-state and out-of-state. This decision was based on Indiana’s “unitary business principle,” which allows the state to tax a corporation’s entire income if it is deemed to be part of a unitary business.
Penn Casino and COST have now taken the case to the Indiana Supreme Court, arguing that the Tax Court’s decision was incorrect and could have far-reaching implications for businesses operating in multiple states. They contend that Indiana’s tax laws are overly broad and unfair, and that they violate the U.S. Constitution’s Commerce Clause.
The outcome of this case could have a significant impact on the gaming industry in Indiana, which is a major source of revenue for the state. If Penn Casino is successful in its appeal, it could mean that out-of-state gaming companies operating in Indiana would be subject to less tax liability, potentially leading to increased competition and innovation in the market.
On the other hand, if the Department of Revenue’s position is upheld, it could have a chilling effect on out-of-state businesses looking to operate in Indiana, as they may be deterred by the state’s aggressive tax policies.
The Indiana Supreme Court has not yet indicated whether it will hear the case, but the outcome is eagerly anticipated by both sides. The decision could have far-reaching implications for not only the gaming industry, but for all businesses operating in multiple states. Stay tuned for updates as this case develops.
