Variety (November 1917)

8 VAUDEVILLE ^»sas—.Jt—c—-^— -^,^—^— ji ") MANAGERS' ASSOCIATION ISSUES OFFICIAL WAR TAX BULLETIN Schedule of Ruling on Questions Sent to Entire Membership. Ligon Johnson, Attorney for U. M. P. A^ Covers All Points for Guidance of House Managers. TAX ON ADMISSIONS. (Read carefully and keep for future reference both aa to method of collecting tax and proper amount of tax to be collected and accounted for.) METHOD OP COLLECTING TAX. The tax should be collected from the purchaser of a ticket whenever a ticket Is delivered by the theatre to a purchaser, and from paas holders, either when passes are Issued or when used. The proper ux to be charged and what, if any, reiunds can be made will be specified laier under appropriate heading*. Ibis bulletin covers the matter contained In our bulletin of October 13 as well as all subsequent rullnfs and new matter. Keep this for reference. ACCOUNTS TO BE KEPT. Enclosed you will find a form of box office statement which covers all the details of present box ottice statements snd at the same time aOords all Information necessary for the proper collection, accounting and return of the admissions tax. Thla form has been submitted to the Treasury and luierual Revenue Depanmenu and has been approved, subject, cf course, to a later change of torm or method by the department. The box office form may be varied In the matter of Its caption (by printing In name of theaire. attraction, etc., if de»tredj ; by reducing the number of lines under head of boxes, orchestra, etc., where there is not such variation In the theatre's prices, or adding more lines where there is* greater variation than is provided for under the enclosed form; by eliminating 2d and od balconies where there are none in the theatre and by adding additional detail In the blank apace where such is desired. The form MUST NOT BB CHANOBD, however, as to any detsil applicable to the theaire or the tax. All Information under each heading MU8T BB KEPT and a box office statement MUST, be signed by BOTH the THEATRE and COMPANY manager lor every performance given In the theatre, In regular attractions, and by the house manager and treasurer of stock, vaudeville and other houses not playing traveling attractions. Where any theatre sells aunual ucaets, season subscriptions and the like, covered by the provisions of the act In relation to "permanent use of box or seats or lease of same," an additional column between the column "No. Passes" and "No. Sold" must be Inserted. (See undtr proper heading of this bulletin for tax In such case.) So few theatres have this that the column was not included in the standard form. A separate box office statement must be made out and kept for each performance. The statement Is simple and easily kept. The first column shows the capacity under each class ot tickets. The additional lines under each class or seat are for the purpoae of a further classification under price variation if there is any. For example, suppose prices for seats for the lower boxes were $;i.uO and In the upper boxea $2.50. On the top line you would specify the capacity in $.'U*J seats and on the second line the $2.50 seats. In a case where seats have been sold In excess of the box office orlce to speculators, as for example. $3.00 seats were sold at $3.25 the capacity would be entered but once to cover the $a.£j and $3.00 charges, this entry being bracketed to show that the $3.25 and $3.00 prices were covered by the same capacity Item. In the same manner If seme of the $2.50 tickets were sold to a cut rate broker at $1.50, the capacity would be entered btu once, and bracketed In the same manner, as otherwise the capacity would appear double what it actually waa. 1 be second column gives the amount of dead wood in the rack after the sale, which when deducted trom capacity, would give the number sold, and afford a check on the number taken in at the door. The third column gives the number of parses to the performance. The fourth column, the number of tickets sold. The fifth column covers gross receipts of tach class and price. 1 he remaining three columns specify the admissions tax, the children's tax and the paas tax. You will note that there Is no separate column for the number of tickets sold for children, as there is for number of passes to the play and the number of tickets sold. This is made unnecessary by the fact that the tax on children under twelve Is but one cent regardless of the price of the ticket. The amount of the children's tax Is the exact number of children admitted. Therefore, li the children's tax under any class showed, for example, 10 cents It would also show that 10 children bad been sold the price ticket covered by that particular line of the* statement. By deducting 10 from the total number of tickets sold, as shown under column four, the number of adults' tickets are shown. Any member who desires to further enlarge the form by substituting for the Column "No. Sold" two columns "No. Sold Children" and "No. Sold Adults" Is at liberty to do so, if this makes the statement simple for him. The NUMBER of aumisnions under each class must be kept as THE TAX IS ON EACH INDIVIDUAL ADMISSION and not on the total price paid. The tax on four twenty-five cent admissions is twelve cents, not ten. The tax Is on the number of tickets sold and not the number taken at the door. The tax is Just as much due on tickets purchased by a patron who fails to attend the performance a? on the admission paid by one who does. Furthermore box office statements MUST BE RETAINED IN THE THEATRE, subject to inspection of the Revenue officials. NOT LESS THAN ONE YEAR. Definite ruling as to the time the statements must be retained has not yet been made, but it will not be less than one year. It may be longer. CHILDREN'S TAX AND TICKETS. The tax on the admission paid by or for children Is one cent regardless of the amount of admls ion paid. The tax on a ten cent ticket for a child is one cent. The tax dn a six dollar ticket for a child Is one cent. Where the maximum price of admission to a place of amusement Is but flvo cents, there 1b no tax either as to children or adults. Where more than five cents Is charged anywhere In the bouse, there Is a one cent tax on both children and adults for five cent admissions. The tax on children's tickets is the most troublesome Item to handle. Two methods have been suggested. (a) By having a rubber stamp In the box office and stamping prominently tho word "child" on the face of the ticket, when a child's ticket Is purchased and a one cent tax paid No adult or child over twelve would be admitted by a doorkeper on this ticket. If an older person desired to use the ticket, an exchange would, be made at the box office and the full 10% tax collected. (b) By charging the full tax on all admlssl ons sold, having the doorkeeper. In each case a ticket Is presented by a child under twelve, Issue a refund check for the difference between the one cent tax on the child and the original tax collected. You may use whichever method you deem best for your own needs. Where strip tickets are used. It Is wiser. In admissions over ten cents, to have double rolls white for adults and red or other color for children. On the white full tax would be charged' on the colored one cent regardless of the value of the ticket. No adult would be admitted on a ticker colored to cover children's admmlsslons. THE TAX TO BE COLLECTED. The war tax on admissions to places of amusement, including legitimate, motion picture and all other theatres, provides that a tax of one cent for each ten cents or fraction thereof shall "BE PAID BY THE PERSON PAYING FOR SUCH ADMISSIONS." This applies toWll raid almlH-ions except to those places of amusement which have a maximum admission charge of Ave cents and to admissions for children under twelve years of age. As previously stated In the cos«. of a ehild under twelve the admission tax is but one cent regardless of the amount of ;dm-«inn paid by or for such n child; where the MAXIMUM admission charge Is five cents no tax Is levied but there Is a one cent tax on five cent admissions for both children and adults where a theatre charges more than five cents for any part of the house. To Illustrate: The tax on a ten cent admission Is one cent: on a fifteen cent admission •■■» '-r.ts; on n twenty cent :idmiss| 0 n. two cents: on a twenty-five cent admission three ulr. . u:, a lhirt> c( iu admission, three cents, and so on. TAX ON Kit 11 SEPARATE ADMISSION. The tax Is on each separate admission and not 10% on the money paid. The tax on one twrr\-f,v. r.-i.t a!ml"lon Is three cents; on four twenty-five cent admlslsons, twelve cents not trn cfi.ts. althoiKh a single purchaser may buy the four tickets. SEASON TICKETS. ANNUAL TICKETS AND BOX LEASES. Where any per on has permanent use of a box or seats, or lease of same, he must pay a tax ta< h time such box or seats are used or exclusively reserved and held for a performance, fx equal to what he would have paid had ha purchased same at regular box office prices for the performance. . «.«.««. In other words, where * person baa exclusive use ar aflsual lease an a box or seats, which box or seats are held exclusively for the use of such person, then a tax must be paid for each performance where such box or seats are so U8BD or HELD, In the same amount that would have been paid under purchase of such seats at regular box office prices for auch performancea. Where, however, a person only baa exclusive right to such box or seats if called for before a performance, and If not so called for. the theatre has the right to dispose of same, then tax would only have to be paid each time auch box or seats are actually used, aa the tickets would be aold If not so called for. TAX ON ACTUAL AMOUNT PAID AT BOX OFFICE. The tax Is on the actual amount paid at the box office and* not the prloa printed on tho ticket or what the ticket may afterward be sold for. The Departments have ruled the tax Is on the actual admission paid regardless of whether It Is the regular box office prloa or under or over the regular box office price. For example. If a patron should come In late and ask for two $1.50 tickets and none wera available, and he waa handed two tickets for which the usual box office price was $4.00 but for which he was only charged $3.00 he waa willing to pay, the tax would be thirty cents, not forty. The box office statement as previously Indicated, must contain a statement of such sales aa otherwise the "capacity." "No. Sold" and receipts will not balance. Where tickets are sold to speculators at an advance over the box office price, the tax Is on price received from the speculator and not the box office price. Where the regular box office price of tickets Is $2.00 but a speculator pays $2.25 for them, the tax la twenty-three cent* on each ticket, not twenty cents. Where the box office sells tickets under the regular price, the tax Is on the price received at the box office. If the regular price of tickets was two dollars but they were sold to a cut rate broker at seventy-five cents each, the tax would be EIGHT cents on EACH TICKET and NOT twenty cents per ticket or 10% on the amount paid by the spceulator. RENTALS AND LEASES. Where for one night or longer and for a flat sum, a theatre Is rented to j>cme Individual, lodge or organisation which gives a performance there, no tax is collected on the rent paid. The person, lodge or organization giving the performance must collect the tax from the persons sttendlng the performance and pay It to the government. The theatre management should Inform the renter of his obligations In this regard and supply box office statement forms on which records should be kept. To prevent complications, whenever such rentals are made, the collector In charge of the district In which the theatre Is located should be notified. The Department advises that this ruling cannot be used to permit fly-by-nlght repertoire companies to ostensibly take over theatrea and escape the payment of tax. The theatre will be held responsible for the collection and payment of the tax under such a contingency. The ruling applies solely to bonaflde rentals of the character Indicated. IT DOES NOT APPLY TO THE SRT.I. oiit of * per'ormance to some local individual or organisation. SELL OUTS OF PERFORMANCES. Where a local Individual or organization buys a performance for some 1 .?■„•? I bcncfU, tho tax must be collected on the price received for the performance. For example: If the Elks or some similar organisation desired to buy n performance for $800 for the purpose of reselling the tickets to its members and the public. e'e,,tin» the profits to the organization, the theatre manager must collect $880 and make proper entry on his box office statement, such as "Performance Sold to Elks Club for $800, tax collected ?&>." and account to the government for $80 tax. The Elks Club In such case would make no tux charge on the resale of tickets, as the government tax would have been paid In the $»SJ tax collected under the sale of the performance to the Elks. BENEFITS. The admission taxes do not apply to admissions where all the proceed" inure exclusively to the benefit of RELIGIOUS, EDUCATIONAL or CHARITABLE INSTITUTIONS, SOCIETIES or ORGANIZATIONS. They do apply to benefits for INDIVIDUALS and all benefits except those falling In the foregoing classification. To Illustrate, If the Masons, Odd Fellow?, Elks or similar organizations should rent a theatre and give a benefit for their sick or other charitable purpose, the admission tax should be collected, as these organizations, being fraternal bodies, cannot be classed as "wholly religious, educational or charitable organization." It is the character of the organization for which the benefit Is given and not the purpose of the particular benefit which affords the exemption. By "all the proceeds" is meant, all the money remaining after paying the actual expenses of the benefit; In other words, the net proceds. REFUNDS. Where a performance is not given and a refund Is made, the full amount collected, that is both admission and tax. Is refunded Where a patron who has purchased a ticket to a performance finds he cannot attend and prior to the performance asks thut tb? ticket be redeemed, If any refund Is made, both the admission and tax should be refunded aa the ticket would again be placed on sale. Where a patron falls to attend a performance for which tickets have been told, no refund of the tax can be made. PASSES. Persons using passes must pay the same tax that they would have paid If the admissions had been paid for at the regular box office price. In other words, the person occupying a fifty cent seat on a pass would pay a tax of five cents; on a dollar seat, ten cents: on a two dollar seat the tax would be twenty cents. The pass tax applies to ALL FREE ADMISSIONS to the theatre EXCEPT bonaflde employees, municipal officers on OFFICIAL BUSINESS (such as firemen and policemen) and children under twelve years of age. There Iff no Government tax on passes to bonaflde employees, municipal officers ON OFFICIAL BUSINESS, and children under twelve years of age. All persons attending a performance other than those specified in the preceding sentence must pay the tax. Newspaper critics and reporters going Into the AUDIENCE must pay. Where a manager maintains an office so located that any person visiting him on business must pass through some portion of the theatre In order to reach the manager* office, no tax is collected, unless such visitors stop to Bee the show or actually become part of the audience. A person visiting a manager In his office on business is not admlted to a place of amusement but merely to the manager's office. Likewise a reporter Interviewing an actor or actress back of stage is not liable to the tax. If the reporter should come from the stage into the audience, he would be liable, the ruling being that any person occupying space In that portion of the theatre set aside for the audience (not merely walking through to get to the manager's office) Is liable to the tax. A pass or cancelled ticket should go In the ticket box wherever any person other than the theatre owner, a bonaflde employee of the theatre, a municipal employee on official business (firemen and policemen) and a child under twelve Is admitted to any performance. TRAVELLING ATTRACTIONS. The TRAVELING ATTRACTION has nothing whatever to do with these taxes except that the company manager should check and sign the box office statement as he has always done. The TAX IS ON THE PURCHASER PAYING THE ADMISSION AND NOT ON THE GROSS. It Is entirely separate from the money paid for admission In which the traveling attraction shares. The collection of the tax is made a duty of the THEATRE. PAYMENT OF TAX BY THEATRE INSTEAD OP PURCHASER. The tax is on the purchaser of the ticket and not on the theatre, and the purchaser must pay the tax. If a theatre should desire to reduce Its admission, or the admission on any class of Beats, bo that the admission originally paid would also cover the tax, the theatre must Inform the public by adequate lobby signs such as "The admission on our $2.00 seats (or whatever It Is) has been reduced so that the $2.00 charge Includes the 10% war tax." Some theatres have found It Impractical to handle pennies and have advanced their twenty- five cent admissions to thirty cents and their seventy-five cent seats to eighty-five cent seats, these prices to Include the war tax. Where this Is done, adequate lobby signs must announce "The amount charged for a thirty cent (or whatever It may be) ticket Includes the 10% war tax on tho admission paid." NOTICE TO PUBLIC OF TAX. By appropriate lobby card and notices In the theatre programs (which notices should be carried for several weeks and until the public fully understands the tax) the public should be informed that the tax Is A TAX ON THE PURCHASER OF THE TICKET, and that the money collected GOES TO THE UNITED STATES FOR WAR PURPOSES. RETURNS OF THE TAX. The Internal Revenue Department will shortly distribute forms for monthly returns of tho tax. The forms are simple and easily made out. The returns for November must be made in December: returns for December In January and so on. These returns will be based on the box office statements. Arrange for your box office statements Immediately. In the meantime, keep the same data which the statements would show. In some permanent form, having the correctness of same certified by house and company manager or house manager and treasurer as directed. UNITED MANAGERS* PROTECTIVE ASSOCIATION. P. S. In the haste to get out the box office form not quite enough spnee was left under "Pass Tax" and too much under "Children Tax." hence black line correction. Ycu may make your statements as wide and as long as you desire.