Casinos face property tax

Wednesday, Feb. 11, 2004 | 9:08 a.m.

DES MOINES, Iowa -- Republican lawmakers were drafting a bill Tuesday to create a property tax on casinos that will be considered if a deal cannot be struck with racetracks to forgive back taxes the Iowa Supreme Court says the state owes.

The tax is designed to immediately replace the $112 million the state owes the racetracks as a result of the court decision.

The racetrack casinos sued the state, saying the two-tiered tax violated the Iowa Constitution. The state was taxing riverboat casinos at 20 percent and racetracks at a higher rate designed to reach 36 percent next year.

The Iowa Supreme Court's decision meant the state owed the racetracks $112 million plus interest for the taxes they had overpaid.

"It's the answer to what we will have to do to ensure taxpayers don't get hung with the tax liabilities the Supreme Court laid out there," House Speaker Chris Rants, R-Sioux City, said of the proposed tax, which would be based on the square footage of the property where casino games are located. Riverboat casinos, which own little land, would pay a smaller tax.