By: John Zippert, Co-Publisher
On August 29, 2019, Jeff Patterson, Chief Judge for the Alabama Tax Tribunal rendered a decision voiding over $75 million in sales taxes and $746.292 in consumer use taxes claimed by the State of Alabama against Greenetrack, Inc.
These taxes and interest were imposed by the State of Alabama after an audit for the period January 2004 to December 2008 and related solely to bingo operations at the taxpayer’s facility – Greenetrack.
Luther ‘Nat’ Winn, CEO of Greenetrack, in an interview with this reporter, said, “We are pleased that the Tax Tribunal, headed by a judge, appointed by Governor Kay Ivey, took an objective view of this matter and gave us a fair hearing on the law and the merits of our case.”
“This matter has been going on for over a decade and we are pleased to see it ended in our favor. Gov. Bob Riley conducted the original tax audit as part of his efforts to closedown Greenetrack and electronic bingo in Greene County,” added Winn
The thirteen page analysis and decision of the Alabama Tax Tribunal reviews the history of Greenetrack’s exemption from sales tax on gaming, starting with dog racing
and continuing to include simulcasting of dog and horse races as well as gaming through electronic bingo, which was the subject of the tax liability that was in dispute.
The original legislation, Act 1975-376, allowing dog racing at Greenetrack imposed various license fees and taxes by the Greene County Racing Commission, also included Section 16, which stated “the license fees, commissions and excise taxes imposed herein shall be in lieu of all license, excise and occupational taxes to the State of Alabama.”
Greenetrack relied on the exemption specified in Section 16 to cover all gaming activities including bingo, which has grown to be the largest part of its revenues.The Tax Tribunal also cites later tax legislation, passed by the Alabama Legislature in 1986, which imposed sales taxes on merchandise, food and beverages sold at dog racetracks within the state. This legislation imposed other occupational, income and ad valorem property taxes on dog tracks but specifically exempted sales tax on admissions and the wagering handle at these facilities.
The Tax Tribunal in its decision voiding the sales taxes imposed on bingo gaming in Greene County said that it was not a legislative body and could not “displace the legislature by amending statutes to make them express what we think the legislature should have done.”
At the end of his decision, Jeff Patterson, chief Judge of the Alabama Tax Tribunal, gives the State of Alabama thirty (30) days to appeal its decision to the Circuit Court. When asked if he expected the State of Alabama to appeal, Winn said, “I cannot speak for the State but I hope they will not appeal and have confidence in the decision of their Department of Revenue administrative judges.”
Knowledgeable observers of the bingo battles between the State of Alabama, Greenetrack and other bingo operators feel this is a great victory that could have imposed retroactive sales taxes on gaming in Greene County that would have closed down this tourist industry, which is providing jobs and fee revenues to government agencies, municipalities, education, healthcare and other services in the county.