Motion Picture Herald (Oct-Dec 1956)

To Hold Hearing on Corporate Tax Rise . . . January 24 date of hearing set by Internal Revenue Service; increase would hit Hollywood production unit companies The Internal Revenue Service has set a public hearing for January 24 on proposed new regulations boosting sharply the tax on certain corporate setups used by some stars and producers to get around high individual income taxes, it was announced in Washington Monday. Late last week in Hollywood, eight groups, going under the general designation of “The Motion Picture Industry Committee,” requested hearings in a telegram to the Commissioner of Internal Revenue. Anyone asking to be heard before January 24, or at the time of the hearing, will be heard, Service officials said. Views presented at the hearings might or might not persuade the Service to modify the proposed regulations. In any event, it could be anywhere from a month to a year before the final regulations are issued and become effective. The Service is presently proposing, however, that the regulations be retroactive to January, 1954. No official anouncement was made of the action taken by the Motion Picture Industry Committee. The telegram was sent only two days before the deadline, which was December 15, set for the filing of protests. The changes in the tax code were published in the Federal Register November 16. The groups that signed the telegram were the Screen Actors Guild, Association of Motion Picture Producers, Hollywood American Federation of Labor Film Council, Screen Directors Guild of America, Writers Guild of America (West), Artists Managers Association, and the Alliance of Television Film Producers. The telegram, in addition to protesting that the proposals conflicted with other provisions in the corporation tax regulations, stated that they were “inconsistent” with administrative rulings made “until recently” by the Bureau. The telegram also expressed fears that the changes were “likely to raise serious problems” for the film production industry by tending to “retard” movie-making in Hollywood. It was stated that they might help as well to accelerate a move TOA, Allied Will Launch New Drive for Industry Arbitration System in January A joint Theatre Owners of AmericaAllied States Association effort to set up an industry arbitration and conciliation system is planned for mid-January, according to Ernest Stellings, TOA president. He said this week it js his hope that a set of rules and regulations for the industry can be satisfactorily accomplished during the new year. Mr. Stellings, who is president of Stewart & Everett Theatres, Inc., in Charlotte, N. C., said he is awaiting word from Allied’s leaders as to “mutual cooperation in formulating an arbitration system.” He said in recent talks with company presidents and sales heads in New York he discussed arbitration and found “they are thinking and looking to the best interests of the industry.” TOA has not named a committee to launch the arbitration proceedings, but, according to Mr. Stellings, when a group is officially announced, Herman M. Levy and Mitchell Wolfson will be members. Allied also has not announced an arbitration committee as yet. A bone of contention to exhibitors in the last arbitration draft, released September 27, 1955, was the provision limiting distributors to two pre-release pictures annually. A simplified conciliation plan was also advanced, designed to get quick decisions in controversies. Some industry observers believe if and when steps are taken to set up a new arbitration draft, the basis for it would come from the 1955 draft and perhaps the one previous to that. A new distribution committee on arbitration would have to be named if distribution decides to work officially with exhibitors in preparation of a new draft, according to a distribution official. He said the Motion Picture Association of America committee has “been more or less disbanded.” The last distribution committee was composed of A1 Lichtman, Charles Reagan, A. Montague and Adolph Schimel. The last exhibition committee included Mr. Wolfson, Mr. Levy, Max A. Cohen and Leo Brecher, each of whom devoted much time to the last draft. ment, already regarded with alarm by unions and talent guilds, of production by American interests in foreign countries. It is estimated that 90 per cent of Hollywood’s so-called independent production companies might be affected by these changes. This would result from the Bureau’s ruling that financing contracts requiring the performances of designated work by an individual owning 25 per cent or more of a company’s outstanding stock would come under the personal holding company tax. The maximum personal income tax is 92 per cent as against 52 per cent for straight corporation earnings. Most of the motion picture and television production financing contracts made by stars, directors, writers and producers owning private companies, require specified individual services. Coast Musicians Union Defeats Petrillo Slate HOLLYWOOD: Insurgent members of Local 47, American Federation of Musicians, this week defeated the faction supporting James C. Petrillo, national president, in the local annual election by a two-to-one margin. The ballot count showed the “Voice of Membership” ticket, headed by Eliot Daniel for the local presidency, held the same ratio for the other top three officers and trustees. Mr. Daniel replaces John te Groen, long-time president of the local. The opposition claimed the musicians are taxed to support Petrillo “stooges,” who are not full-time career musicians. They also protested the five per cent fee tacked on the gross cost of all live TV shows, since it often runs higher than the cost of the orchestra, bringing unemployment and causing producers to use imported sound tracks. " Great Future " Ahead For Films: Rothafel A highly optimistic future for the motion picture industry was foreseen this week by Robert C. Rothafel, managing director of the Roxy theatre, New York, who was master of ceremonies at the 40th annual Christmas party of the Associated Motion Picture Advertisers, Inc. He said that while the industry is now facing a critical challenge, “films have a great future.” The mission of the industry is to get the masses back to the theatres, he added. Approximately 125 industry and newspaper figures attended the luncheon at the Hotel Piccadilly. GPE Dividend Totals General Precision Equipment Corporation during the calendar year 1956 paid cumulative convertible preferred stock dividends of $4.75 and cumulative convertible preference stock dividends of 80 cents, the company announces. Common stock dividends amounted to $2.40. MOTION PICTURE HERALD, DECEMBER 22. 1956