The Independent Film Journal (1954)

Grass Roots Back Toll TV Campaign; FCC Action Near Exhibs Upheld On Tax Breakage By Appeals Court I A partial victory was won by Gotham exhibitors this week in their court battle against the municipal five percent amuse¬ ment tax. The Appellate Division, Second Depart¬ ment, ruled in a three-to-two decision that, the city had no authority to collect more than five percent of the established admis¬ sion price. The amusement tax law, in force since July 1, requires the collection of a full cent in cases where the tax involves a frac¬ tion between a half-cent and a full cent. Presiding Justice Gerald Nolan, who wrote the majority opinion, held that the court could not discover in the 1947 State Enabling Act “a clear intention to permit” the collec¬ tion of breakage. Where there is a reason¬ able doubt as to the meaning of tax law lan¬ guage, Judge Nolan wrote, the issue should be resolved against the taxing authority. Previously, a lower court had found that the enabling act did not reveal “a clear inten¬ tion to prohibit” the collection of breakage and that therefore the local law was valid. The new decision also held, in effect, that the remainder of the tax law was still valid, but suggested that exhibitors take their case back to the Queens Supreme Court for trial of each issue. Assistant Corporation Counsel Stanley Buchsbaum, who represented the city, said this week that he will ask the Appellate Division’s permission to appeal the ruling to the Court of Appeals in Albany. He hopes to have the city’s appeal heard in Albany at the court’s Feb. 21 session. If this is impossible, the appeal will not be heard before late next month at the earliest. The city can only appeal if the Appellate ruling is a final order, which is doubtful. Three Judges Concurred Justices Nolan, Wenzel and Murphy con¬ curred in the majority opinion. Justices MacCrate and Beldock dissented. In the dissenting opinion, Justice Beldock held that the major fraction policy adopted by the city was not only “practical” but “commonsense.” Should the Court of Appeals in Albany finally uphold the Appellate ruling, another legal battle would undoubtedly ensue, with the city seeking to obtain the now withheld breakage monies. As of last Nov. 30 the city reports it has collected $1,119,793 from the film theatres, with the breakage already withheld by exhibitors-plaintiffs in the tax suit totalling $190,418. It has been conservatively esti¬ mated that breakage collected by next July will reach $750,000. A similar instance involving tax refunds is the Kasbec case of 1938, wherein a gasoline station had turned over money to the city on a tax which was later invalidated. The Court of Appeals then held that those who collected the tax on behalf of the city were not entitled to the tax money simply because the levy was invalidated. Metropolitan theatres are urged to con¬ tinue to exhibit in a conspicuous place the signs telling patrons to hold on to their ticket stubs, as they might obtain a refund. Marc Wolf, prominent Indiana exhibitor, turns over Joint Committee On Toll TV contribution pledges from Indiana exhibitors to William A. Carroll, executive secretary of Allied Theatre Owners of Indiana, who will forward them to Philip Harling, treasurer of the joint Committee on toll TV, as an indication of the sentiment and support of the committee's work by Indiana The¬ atre owners. Washington. — Subscription television took two giant steps toward active consid¬ eration by the FCC and by the Senate Com¬ merce Committee, but there was no indication that pay-as-you-see had thereby made any progress toward actual approval. FCC sources disclosed that the commission will move “off center” on the subject within the next few weeks. The commission has been motionless for years in this respect. Sen. Warren Magnuson (D., Wash.) revealed that the Senate Commerce Committee of which he is now chairman will take its own look at toll TV during the current session. The commissioners actually discussed staff studies on pay-as-you-see TV, but found that the studies were incomplete and ordered a more thorough report. Authoritative informa¬ tion indicates that the new information will form the basis for some sort of action in about two weeks. It may be recalled that the FCC annual report indicated FCC indecision about whether subscription TV is legal, in the public interest, or if it is both, whether it should be declared broadcasting or a com¬ mon carrier. Any contemplated action is more likely to involve solicitation of arguments on these points than it is to involve steps lead¬ ing toward either outright approval or dis¬ approval of the system as such. In New York, the Joint Committee on Toll TV is expected to announce plans for the collection of voluntary contributions to achieve its goal of $150,000, with which to campaign against pay video. Contributions are being sought from among all exhibitors, who have been asked to contribute amounts equal to their COMPO dues last year. For four-wall theatres with up to 500 seats, the amount w’ould be $7.50 ; up to 750 seats, $11.25; up to 1,000 seats, $17.75; up to 2,500 seats, $37.50; over that, $75. For drive-ins accomodating up to 300 cars, $7.50; up to 500 cars, $11.25; up to 600 ears, $18.75; over that, $37.50. Exhibitors were asked to send their contributions to Philip Harling, treas¬ urer, at 1585 Broadway, N. Y. C. All exhibitor organizations are expected to support the fund-raising effort, since all participated in the original decisions of the Joint Committee. A pledge that the member¬ ship of New Jersey Allied would financially support the campaign was announced after a meeting of the group this week by presi¬ dent Wilbur Snaper. Texas exhibitors also unanimously pledged financial support to the anti-toll-TV cam¬ paign and appointed a committee to contact exhibitors in their area to participate in the campaign. Julius Gordon, member of the Joint Committee, speaking at a luncheon in Dallas where the decision was made, stated : “The industry is months behind in its pro¬ gram to stop the deadly menace of toll-TV. We must unite and get the true facts to the general public.” Col. H. A. Cole, chairman of the board, Texas Allied Theatre Owners, declared: “The first aim of toll-TV is to take away subsequent runs from theatres, then graduate into first-run operations later.” Harold Wolff, recently retained by the Joint Committee as public relations counsel, will address National Allied’s Drive-In Conven¬ tion next week (Feb. 8-10) at the Chase Hotel, St. Louis. According to Allied’s an¬ nouncement, he will “describe and analyze the vast propaganda campaign that is being waged by the proponents of subscription television. Few exhibitors,” said Allied, “real¬ ize the extent of that campaign, the skill with which it is being conducted . . .” The convention is open to all drive-in operators whether they are Allied members or not. Letter Approved Meanwhile, the NARTB has denied the charge of Commander E. F. McDonald, Jr., president of Zenith Radio Corp., that the statement of NARTB president Harold Fel¬ lows last month was tantamount to toll-TV opposition. Fellows had urged the FCC not to approve Zenith’s request for immediate authorization without a full-scale public hearing, declaring that the public should have a hearing. Clair R. McCullough, chairman of the NARTB’s television board, in a letter to McDonald, denied that the NARTB has aligned itself with interests opposed to sub¬ scription TV. McCullough said that the group’s only interest in presenting its views to the FCC was to “encourage appropriate regulatory procedures.” McDonald had charged not only NARTB bias against pay-as-you-see, but also said that Fellows had acted without authority from NARTB. McCullough denied this charge, and said the board had approved the Fellow’s letter as well as his own leter to McDonald. In Hollywood, Spyros P. Skouras, 20thFox president, called upon producers to do as much as possible to help exhibitors fight toll TV. He stated that the theatre men face a very strong fight and with this in mind, Skouras gave his assurance that the majority of effort of the company’s research depart¬ ment will be directed toward 35 mm. develop¬ ments on CinemaScope. Earlier, A1 Lichtman, 20th-Fox distribution director, had affirmed Fox’s sympathy with the exhibitors’ stand but stated that Fox is in “no position to do anything about it” because of its status as a defendant in the government’s 16 mm. anti¬ trust suit. THE INDEPENDENT FILM JOURNAL— February 5. 1955 s