The Independent Film Journal (1955)

ISleed Relief: Coyne US Tax Figures Proposed Capitol Admissions Tax Draws Fire At Hearings 'Washington. — Efforts to prevent the tax pendulum from swinging back toward addi¬ tional excises brought top industi'y repre¬ sentatives to Washington this week to testify in oiiposition to two new taxes jiroposed for the District of Columbia. The joint SenateHouse District of Columbia committee heard Julian Biylawski, president of the Metro¬ politan Theatre OAvners Association, Robert Coyne, COMPO special counsel, and Albert Sindlinger, industiy researcher, aver to the inadvisability of such levies. The Dvo taxes call for a one cent levy per 50 cent admission plus a hvo percent levy on film rentals. Coyne, Avho piloted earlier admission tax reduction bills through the House, declared that the industry urgently seeks relief, not more tax. 'Fair Share Okay’ Film theatre operators in the District are willing to pay their fair share of taxes, but don’t want to be hit with special levies, Br^daAvski stated. The Stanley -W'arner executive, apiiearing as president of the local theatre owners as¬ sociation, objected to a jAroposed admissions tax as discriminatory and as potentially damaging to an industry desperately stniggling to keep its head above water. He also objected to the proposed taxation of film rentals as tangible personal property, term¬ ing such a tax ‘‘a peniicious precedent and of doubtful legal value.” COMPO research consultant Albeiff L. Sindlinger told the Committee that motion picture gi-osses in the last quarter of 1955 were down 15.2 percent nationally, and were down in the District by 21.7 percent since October 1. He said that the estimate of $500,000 receipts from a 2 percent admissions tax would require a $25 million gross, but that based on the usual motion jAieture contribu¬ tion of 75 lAcrcent of admission tax receipts, it would be found that the gross would not exceed $10,700,000. Others Protest Other voices, representing the legitimate stage, concert music and professional base¬ ball, were also raised in protest over the District tax proposals. The joint Committee heard Scott Kirkpatrick, manager of the National Theatre; Patrick Hayes, concert bureau head; and John E. Powell, secretary of the Washington Senators ballelub, testify against the new excises. Brylawski told the Committee, “if any tax rate goes up, we will pay our share of it willingly, but we do not wish to be singled out for any special tax, especially if this tax would be imposed on an industiy that is literally and actually fighting for survival at this time.” He pointed out that reduction of the Fed¬ eral admissions tax had saved 1,000 IT.S. theatres from bankruptcy, and said “we are liopeful that the Congress will remove the Federal excise tax on all admissions in the near future.” Th(‘ S-'W executive pointed out that only one theatre has been built in 'Washington during the last five years, while between 10 and 12 have closed. Meamvhile, 13 large modern theatres have been built in the suburbs, plus 12 drive-ins, immeasurably weakening the theatrical position within the District. Faced with “terrific competition” from TV, night baseball, and other sports, “the motion picture industiy is really surviving onl_y by the skin of its teeth. Any additional expense, no matter how small, may be the straw that breaks the camel’s back.” Brylawski pointed out, as to the “tangi¬ ble personal property” proposal for a new tax, that “the ‘tangible’ personal property involved is merely the celluloid film which serves as a carrier for the production ; its value is but a few cents ; and, its lease value is too little to bo computed. “The principal of this valuation has many precedents. Films imported into the U.S. are not taxed on the literaiy value of the film, but only on the value of the stock on which they are printed. Even the District of Co¬ lumbia in their personal tax imposts do not regard the subject matter on the film as taxable, but this is exactly what we lease and the inclusion of such tax on film leasing would be an indefensible and pernicious precedent and of doubtful legal value.” The admissions tax is one of a nund>er of excises proposed by the city commissioners to raise revenue, Avhich has been presented to the Congress by Rep. HoAvard Smith (D. W’^.Ya.). BiylaAA'ski noted that the revenue gains from the theati'C tax has been over¬ estimated and that the District’s 56 theatres Avould not be able to stand the loss of busi¬ ness that Avould result from the tax. BrylaAvski told reiAorters that the TOA board is giving full backing to the local group in its fight, and that it Avould ask its members to get in touch Avith their OAvn Congressional representatives asking defeat of the tax. EDITORIAL With the industry jilanniug a campaign for total repeal of the Federal admissions tax nationally. Bill HR 8168, now before the Joint Senate and House Committee, call¬ ing for a one cent (1^) levy for each fifty cent (50^) admission, plus a tAVo percent (2%) leAy on film rentals in the District of Columbia, should be objected to by exhibi¬ tors all over the nation. Members of the committee are Senators Albert Gore (Tenn.), Alan Bible (Nevada) and J. Glenn Beall (Md.); Representatives are IIoAvard W. Smith (Va.), Oren Harris (Ark.), W’^illiam L. DaAvson (Hh), John Bell "VVilliams (Miss.), J. T. Rutherford (Tex.), Joseph P. O’Hara (Minn.), Henry 0. Talle (loAAva), James C. Auchincloss (N.J.), John J. Allen, Jr. (Calif.). In our previous tax campaign, it should be noted, seven of these gentlemen Avere for total repeal. Tavo are necvly elected. Drop these Congressmen a line, telling them why this legislation is unfair and dis¬ criminatory and Avould impair the forth¬ coming national repeal effort. The industry needs relief— not further taxation. Forecast Added Exhibitor Burden With the 1956 tax repeal campaign under Avay, and Avith industry officials fighting further excise inroads (see column left), the Federal gOA'crnment released figures this Aveek throAving some startling light on the extent of the futui’e tax burden the American exhibitor will be expected to carry. The Ad¬ ministration expects to collect $110 million for the fiscal year starting July 1, 1956, ex¬ ceeding expected revenue for the current fiscal year by $2 million. During the 1955 fiscal year, exhibitors contributed the major portion of the U.S. admissions revenue of $106 million. In the past quarter ending Sept. 30, 1955, the Government collected over $26 million in admissions excises. Eisenhower Message The President’s Bureau of the Budget bases the rise from $108 to $110 million on continuing high employment and high na¬ tional income. In his budget message to Congress, EisenhoAver labeled the excise taxes a necessaiy rcAmnue source, and \miccd deter¬ mination to keep taxes at their present leA'el. Under the Administration’s efforts to balance the national budget, 13 cents on the Treasury dollar must noAV come from excise revenue. Despite the President’s apparently ada¬ mant position on the excise question, remarks by Speaker of the House Sam Rayburn late this week indicated that the tax situation was by no means a closed issue in top politi¬ cal circles. Rayburn voiced his intention to “recommend a tax cut” to this session of Congress. The elder Democratic statesman added, “Mark my Avords, in an elections year like 1956, I pi'edict before Congress ad¬ journs, that the Administration itself Avill recommend a tax cut.” WTth the President’s budget message throAving darker shadoAVS over American ex¬ hibition, the importance of the COMPO re¬ peal campaign is rapidly emerging in sharper relief. Additional light on the campaign Avas throAvn by TOA officials in a press confer¬ ence this Aveek, attended by president Myron Blank, Pat McGee and Herman Levy. COMPO Campaign Certainty that Allied as AA^ell as TOA Avill su])port COMPO in the admission tax repeal fight Avas voiced by McGee, Avho was cochairman of the first repeal campaign. Com¬ menting on President Eisenhower’s knoAvn oijpo.sition to further excise tax reduction this year, and on the possibility that per¬ sonal tax reductions AA’ould be granted in an election year, McGee said: “WV don’t knoAv AAdiether this is the right time, but Ave must tiy cA-eiything’.” He said that ec-en an unsuccessful campaign this .year Avould make it easier to get relief in 1957. Furthermore, he said, “Congressmen feel Amry sympathetic. toAvard sick industries.” Blank added that suiiport Avould come from merchants aaJio find that thriving theatres help the business and social life of a community. The budget message also calls for almost a three-fold increase in funds for overseas film program of the LhS. Information Agen¬ cy, from this year’s $4,077,573 to $12,883,000 for fiscal i957. The over-all budget appronriation for the agency boosts the outlay by $48 million, to $138 million for the year. 6 THE INDEPENDENT FILM JOURNAL— January 21, 1956