A new state law will make it less expensive for out-of-state bus companies to bring tourists to Atlantic City.
The bill to exempt these companies from corporate business taxes was signed Wednesday by Gov. Chris Christie.
“The out-of-state buses that travel to Atlantic City represent a vital part of our local economy, bringing thousands of tourists to the resort each year,” said Sen. Jeff Van Drew, D-Atlantic, Cape May, Cumberland, who sponsored the bill. “We need to do our part to make sure the buses continue to run, and that companies bringing folks to the city, including our restaurants and shops, aren’t hindered by New Jersey’s tax structure. As we continue our work to revitalize the resort area, this will encourage more business, travel and tourism to Atlantic City.”
The number of visitors who come to Atlantic City by charter bus has dropped steadily over the past 25 years.
Casino bus passengers used to represent close to half of Atlantic City's annual visitors. However, bus traffic has plunged since peaking at 14.2 million passengers in 1988. In 2011, there were just 3.2 million casino bus passengers, only 11 percent of the city’s total of 28.4 million visitor trips, according to figures compiled by the South Jersey Transportation Authority.
The tax is a levy on the income that most for-profit corporations receive in the state. Firms typically pay 6.5 percent, 7.5 percent or 9 percent of their net in-state income, or at least $500 to $2,000, depending on their gross receipts. The tax dates to 1884, when the state first assessed a franchise tax on all in-state corporations.
It is now state government's third-largest source of revenue, behind income and sales taxes. Law changes have generally increased the amount of money raised, from $1.3 billion by June 2001 to $2.2 billion by June 2011. But because it is tied to economic activity, it rises and falls with the economy. Between June 2008 and June 2010, the tax's revenue fell from $3 billion to $2 billion, a stunning collapse of a third, but the state nonpartisan Office of Legislative Services expected the tax to raise $2.6 billion by June 2013.
Now these companies that bring in tourists will be exempt from the tax, which the state Office of Legislative Services reported could cost the state between $150,000 and $750,000 per year in lost revenue. The office said it did not think revenue gained from increased tourism could make up for the lost revenue.
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