Exhibitors Herald (Jun-Dec 1917)

jjjffii EXHI BITORS HERALD \£M Film Distributors Defend Stand on Reel Tax Deny Charges That They Are Making a Profit— Claim That the Government Intended They Should Be On y a Means of Collecting Revenue — Make Public Pay Denying that the tax of 15 cents per •eel per rental day is adding one cent of jrofit to their receipts, nine members of he National Association of the Motion Picture Industry' in a statement captioned 'The Truth About the War Tax," just ssued, urge the co-operation of exhibit>rs in passing the tax on to the public. In defending themselves for insisting hat the exhibitor must pay the reel ax, the manufacturers and distributors • 'haracterize themselves as simply collecion agents for the government. They ♦ 'ioint out that taxes imposed on other A ommodities which, with the motion ■ j.icture industry, are classed as "luxHLries" are absorbed in the selling cost ; nd the price raised to the consumer. Collect From Public . "The government never expected us Jo pay the money out of our own pockIjts, but it does hold us responsible tor Mhe amount, and it is not concerned in ■|ur method of getting it," reads one • art of the defense. ■ "The only possible place we can collect it is from the public, but we can't "■To this direct because we don't own Hheatres. We, therefore, have to do our ■bllecting through the people with whom ■ re deal directly — the exhibitors," it lontinues. The statement in full is Elrinted in another part of the Herald. Accountants Fix Cost The film men employed the firm ot rice, Waterhouse & Co., expert ac-ti suntants of New York and Chicago, to ake a full investigation of the tax and ;port the exact cost per reel imposed M \f the same. I In their report the accounting firm : ts forth that the tax went into effect \. h October 4 and that it will be paid j lly once on each print. Summing up. E.e tax on positives, prints, raw stock t eluding waste and prints not published, gether with the tax on negative raw I m, they place the total tax per reel t $8.75. From information furnished them I ey place the average times per rental l| each print at 50 and from this, fixed e cost of the tax per rental day at 16 nts. The report of the accountants m . 11, follows: Price Waterhouse Report At your request we have computed e cost of footage taxes imposed on i !m bv the War Excise Tax Law of 17. The law is in some respects amjuous; the figures given herein are sed on an interpretation of the law reed upon by your members and are :bject to the final determination of the waning of the act. (1) The tax will be imposed only on aim released after October 4. 1917. (2) The tax — cent per foot — Sec. 300 D — will be paid only once on each print, not paid each time the print is eased. Upon this basis the cost would be larly 9-10 cent per foot of released posi/e, the taxes being ^ cent on released J nts, Yt cent on raw stock, including vste and prints not released, together with cent on negative raw film, none of which is leased. Sec. 1007 provides that where contracts are made prior to May 9, 1917, the film owner may collect the tax from the lessee. We understand that you have agreed that the manufacturer or producer must in some way make a charge to the lessee to cover this footage tax. This can be done in several ways, some of which arev as follows: (1) Collect the whole tax from the exhibitor who first leases a print. This would be easy for the manufacturer but unjust to the exhibitor. If the latter happened to get a new copy he would pay the whole tax. Sec. 1007 of the law cited, however, seems to contemplate just this method. (2) Division of the tax ... :. the successive lessees of a print. Unfortunately no one can tell in advance how many times a given print will be leased; the accounting would be burdensome; the plan is not easily worked. (3) An average charge on all film leased; the charge to be sufficient to reimburse the manufacturer for taxes paid. Plan No. 1 is too unjust for serious thought. P.an No. 2 is theoretically correct, but the work it would entail would double the total cost of the tax. It would offer special difficulty in the case of replacements of reels or parts of reels, because replacements if made after October 1, 1917, would pay footage tax. You would have the anomaly of subjects, some copies of which were not taxed, some partly and some wholly taxable. Maryland Exhibitors To Make Censorship A Political Issue Candidates for Next Legislature Will be Asked to Take Stand on Board's Abolition Baltimore, Md. — (Special to Exhibitors Herald) — A campaign to have the next state legislature abolish the motion picture censorship board was launched at a convention here of the Motion Picture Exhibitors League. The league will have the cooperation of the film corporations in their activities. The theater men are determined to make the censorship board a leading issue in the coming election of state legislators. Every candidate will be asked for an expression of opinion concerning the board and those who favor its abolition will have the support of the exhibitors. Film corporation salesmen will visit every exhibitor in the state in this connection. In addition to this slides will be shown in theaters throughout the state calling upon the public to support only those candidates who favor putting the censorship board out of existence. 15 Upon the whole the third method appears to be best. If adopted, the charge to exhibitors would take the form of an addition to the rental of a fixed amount per reel per day, the amount being computed as follows: Cost (per reel) of taxes, approximately S8.75. Number of rental days earned by each print per estimate furnished to us and according to the best information we can obtain, average 50. Cost of tax per rental day, per reeL, 16 cents. So far as we can ascertain the average of rental given above is reasonable. The charge would apply on all film, old or new: the manufacturer pays the full tax upon release, and the charge would have to be applied on all fi.m to reimburse the manufacturers outlay. On the other hand, upon the repeal of the law the charge should cease immediately, although there would then be much film in use on which tax had been paid. Even this plan would entail much additional clerical work. The number of tax items would be the same as the number of entries of film renta's, the individual amounts being very small. The manufacturers and distributors contend that their only means of absorbing the tax was to raise the price of their service to the exhibitor. To attempt to pay the tax themselves, they declare, without an increase in the price of their output to the exhibitor, would be ruinous. Paramount Rental Scheme Hit by New Jersey Men Drastic Action Planned Unless Demanded Concessions Are Allowed Following the recent lead of a group of Bronx. New York, exhibitors the exhibitors association of New Jersey are planning drastic action against the ParamountArtcraft combination, with a view to curbing extortionate rental demands and inequitable contract conditions. Following a clash between certain members of the New Jersey organization and representatives of the film company a meeting was held at which it was tentatively planned to quit the showing of subjects issued by the company unless there was a reduction in rentals allowed together the elimination of the '"separate deposit." Subsequent to this meeting other representatives of the film company called on the more irate members of the association and offered them a moderated rental charge and other concessions.