I screwed up my taxes once. It was in the early days of my poker writing career, when I was new to this whole independent contractor life. Like a responsible future retired person, I socked away money in a retirement account. As I was self-employed, my investment vehicle of choice was a SEP-IRA. I was aggressive, putting away much as I could, blissfully and stupidly unaware that there was an annual limit to contributions, based on my income. When I figured that out a couple days before taxes were due, I scrambled to transfer money from my SEP-IRA to a different retirement account and then filed for an extension. It all turned out fine, which is not what can be said about the predicament Bensalem, Pennsylvania’s Parx Casino has found itself in. It paid too much in taxes and will never see that money again.
Next time, don’t dilly-dally
The scenario goes back half a decade. Parx Casino discovered that it had overpaid its taxes on slot machine revenue for a three-year period: January 1, 2009 to January 4, 2011. On June 18, 2014, Greenwood Gaming and Entertainment Inc., Parx’s parent company, filed a request to have $1,122,654 refunded from the Pennsylvania state government.
On Monday, Judge P. Kevin Brobson ruled that the state did not have to pay Greenwood any money. The reason: the company missed the filing deadline.
The state allows requests such as Greenwood’s to be filed within three years of when the taxes are paid. That gave Greenwood/Parx until January 2011 to ask to recoup the money. Unfortunately, for Greenwood, the company filed the request in June 2014, six months too late.
Judge had little sympathy
The company tried to argue that it was not looking for an actual refund, but rather wanted a future tax credit and therefore the three-year deadline should not apply, but the judge wasn’t buying it. In fact, in the written Opinion, the tax code was quoted, “for refund or credit of the tax, interest or penalty.”
The judge did go into detail, leaning on precedent for the ruling. He also evaluated whether or not there should be some distinction between a “refund” and a “credit” and if that distinction was important here. He said that while refunds and credits are certainly not the same, there is no reason to assume the code was originally written with a distinction in mind when it comes to the three-year deadline. There are times when only “refund” is mentioned in the code, but it is paired with “credit” enough that it is reasonable to assume they go hand-in-hand.
“Accordingly, regardless of the substantive law on which Taxpayer bases its credit claim, the procedure that Taxpayer invoked to seek relief from the Department compelled the Department’s dismissal of its petition for refund as untimely,” the judge wrote.
“Accordingly, for the above-stated reasons, Taxpayer’s exceptions are denied and F&R’s order is affirmed.”
While nobody is going to shed a tear about a major casino losing $1 million, this does stink for Greenwood and Parx Casino and probably (especially) the person or persons in charge of filing their taxes.