Indiana Live asks court for $23 million tax refund

December 10, 2011

A Shelbyville racetrack and casino has asked the bankruptcy court in Delaware where its Chapter 11 case is being handled to take its side in a fight to get a $23 million tax refund from the state.

Indiana Live, which filed for bankruptcy in April, earlier this year successfully petitioned the U.S. Bankruptcy Court to reinterpret state law in a way that would lower what the racino considers to be an unfair tax burden.

In a July court filing, Indiana Live contended the state is unfairly taxing the racino on money it doesn’t get to keep. Indiana Live and the state’s other racino, Hoosier Park in Anderson, pay taxes on a 15-percent chunk of revenue that goes into horse-racing trust accounts and is used primarily to benefit the horse-racing industry.

The court sided with Indiana Live on the tax matter in October. Based on that ruling, the racino contends, it is entitled to recoup $23 million, or the amount paid on the 15 percent set aside for horse racing since 2008.

The racino appealed to the Indiana Department of Revenue for a refund last year, but the department rejected the request in August. Now, Indiana Live argues that the bankruptcy court has authority to bar the department from taxing the racino on the set-aside.

Hoosier Park joined in Indiana Live’s tax case in August and has appealed to the state for a tax refund. If the bankruptcy court rules positively on Indiana Live’s refund request, it could strengthen Hoosier Park’s chances of also getting a refund, said John Keeler, general counsel for Hoosier Park’s parent, Centaur.

It could be several months before the matter is resolved. The state has appealed the bankruptcy court’s ruling on the tax issue and filed an emergency motion requesting the court wait to rule on Indiana Live’s refund until the appeal is resolved.


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