Variety (November 1917)

VAUDEVILLE WAR TAX BECOMES EFFECTIVE; COLLECTI ONS STA RTED NOV. 1 Estimated Government Will Receive Weekly Return of $100 9 000 from Theatres in New York City Alone. Fi Rulings Handed Down in Washington Last Week. Film Men Get Last Minute Con- cessions on Footage Tax. The collection of the War Tax on Ad- missions started yesterday at all of the theatres in the United States. The vau- deville and burlesque theatres with daily matinees got a flying start on the majority of the legitimate houses (Win- ter Garden and Hippodrome being the only Thursday matinees in New York), and in turn the picture houses, where the grind starts before noon, were the first to exact the war levy from tl public. After midnight Wednesday those taking trains were also hit fq/the war tax and a number <\i vaudeville acts making the usual split toeefejumps had to pay. The vaudeville, burlesque and picture theatres where practically all the sale is at the window just prior to the time of performance and not in advance to any great extent were more or less tied up with lines yesterday. The legitimate houses fared better, one of the factors being that pennies do not figure in their tax levies as much as they do in variety houses. During the last few days prior to the day going into effect the local collectors of internal revenue throughout the country have been swamped with re- quests for rulings from theatre man- agers, particularly those having picture houses, for rulings on the law. The law being interpreted regarding the tax on films ready for projection, to mean that a tax of one-half cent per foot was to be paid each time that a film was rented was the cause of a hurried trip to Wash- ington on the part of a number of film men Monday. By showing that the placing of a tax of $25 on each rental of a five-reel picture, the film men said it would mean the closing of practically half of the picture theatres in the coun- try, and the reading of the law was then so interpreted as to place a tax of that amount only on the first rental of each copy in use. Various estimates have been made as to the amount the Government will re- ceive weekly through the medium of the tax on the admissions to amuse- ments. From New York City alone it is believed that the wee'kly revenue will be approximately $100,000. There are at present 45 legitimate theatres in New York. From five, Winter Garden, Cen- tury, Hippodrome, Globe and Manhat- tan, the Government's share will be about $17,500 weekly. Average business at the other 40 houses at $8,000 weekly would bring a total of $320,000, which would give the Government $32,000, a total of $49,500. This is without includ- ing the vaudeville and burlesque houses. There are eight first class vaudeville houses in Greater New York, playing to an average of $11,000, and six bur- lesque houses, at approximately $5,000, will bring almost another $120,000 gross. This still leaves the pop vaudeville houses, of which there are 20, and the picture houses, numbering 494, to be accounted for. The former will add an- other $100,000 to the total, while the picture theatre* will hooar that $500,000 additional. This would bring a total of almost $1,250,000 spent in New York weekly on the theatre and the Govern- ment would get a little more than 10 per cent, of this. This is figuring on admissions alone, and not counting the tax to be received from the film, both raw and produced stock. With this as a basis it is figured the country at large spends at least $10,- 000,000 a week in the theatres and the Government will boost that $1,000,000 which it will receive in tax. At present there is no manner of computing an estimate of war tax to be received from admissions to caba- rets, as there has not been definitely laid out what the Government tax is to be based on, either the couver charges that are made or the check's total amount. This, however, will be another important item, at least as far as New York City is concerned. The railroad tax is eight per cent, on Transportation and ten per cent, on Pullmans. In the case of the Lehigh Valley R. R., the amount of the tax is to be added to the total of the fare, thus the party rate of $7.50 per capita for 25 tickets from New York to Buffalo becomes $8.10 per capita. The baggage car that goes with a block of 25 tickets will travel free, but each additional bag- gage car will be taxed eight per cent, on its computed mileage at 20 cents per mile. An extra car from New York to Buffalo, which formerly cost $82.20, will figure at $88.78. Ligon Johnson, general attorney for the United Managers' Protective Asso- ciation, issued the following bulletin to all the members of the association after his return from Washington last week with a ruling on the various questions that were left open. The bulletin prac- tically covers every question regarding the tax that would effect the local man- ager pf any legitimate theafe. The bul- letin, as well as the Government ap- proved uniform box office statement, is herewith reproduced: Pat Casey of the Vaudeville Manag- ers' Protective Association issued the following letter Monday: N«w York, October 29, 1017. Dear Sir: It baa bean decided by tbe eommlttea in charge of tbe War Tax at Washington tbat tbe box office statements of eaob performance must be kept on Ale for at leant one year, no tbat aame may be examined at any time by an authorised repreeentatlve from the Internal Revenue Gollector'e office. Under thlc ruling It will be nummary for each theatre to use a form of etatement that will ehow In conjunction with the regular re- ceipts the amount collected for taxee on the different admlaalone and passes. At tbe end of each month a tabulated state- ment, showing the amount of taxee collected dally, should be sent to the local Internal Revenue Colletcor together with check cover- ing aame. In theatres where coupon tioketa are used the tax to be collected from the purchaser In all cases Is to cover the amount actually paid by the purchaser for admission. For In-' stance, In case the price of admission runs from twenty-five cents to one dollar, and should you at any time sell a tloket for lees than Its face value, you are to collect a tax cover- ing tbe amount the ticket la actually sold for. Where any performance Is sold outright for a flat sum the.amount of tax to be collected Is a sum equal to ten per cent, of the amount received for that special performance. This applies to cases where a society or organisa- tion might buy the house outright for one performance and then dispose of the tlckots as they see fit. In all of these oases the amount of tax to be collected by tbe theatre should be ten per cent, of the amount re- ceived by the theatre from such organisation or society. It Is Important that you pay strict attention to your box office statements, for remember, the people you have to answer to regarding same Is the United 8tates Government, and at the present time they have very little (If any) time to listen to excuses, so guide yourself accordingly. Very tmlr yours, VAUDEVILLE MANAGERS' PROTEC- TIVE ASSOCIATION, By PAT CASEY. Greater New York is divided into four districts for the collection of internal revenue and the houses will make set- tlement to the collector for the respec- tive district in which they are situated. The theatres below 14th street will set- tle at the 2nd District office, which is at the Customs House; the theatres be- tween 14th street and the Harlem River at the 3rd Dist., at 1150 Broadway; the Bronx theatres at the 14th Dist, while the Brooklyn houses will make returns to the office of the 1st Dist. Collector for the 3rd District, Mark Eisner, on his return from Washington last week called the members of the trade press that circulate among the motion picture exhibitors into his office and made a statement regarding the misinformation that was being spread broadcast by the "Exhibitors' Trade Re- view." He stated the paper's authority on tax misinterpreted the law when he stated that all five-cent admissions were exempt from taxation, and also that the monthly settlement form which carried a label to the effect that it had been approved by the Internal Revenue De- partment was not the approved form. The Government will issue the forms to the exhibitors when they are printed. As to the question regarding five-cent admissions, they are only exempted when five cents is the maximum charge that is made by a theatre, but where a house charges ten cents in one section and still has five-cent seats in another part of the house, the latter will be tax- able to the extent of one cent per ad- mission. Providence, R. I., Oct. 31. The problem of levying the war tax of one cent on theatre tickets sold to children in the playhouses of this city which has been perplexing local man- agers is believed to have been solved as the result of a plan proposed by Charles Lovenberg, manager of the Keith houses here. It is believed that this plan will operate with the least amount of confusion. Managers here have had in mind the temptations for persons just above the age of 12 years, and some much older, to attempt to evade the war tax by purchasing a child's ticket with the one cent tax and then make an en- deavor to use it themselves. With this in mind Manager Loven- berg has devised and adopted a plan whereby a small adhesive stamp will be applied by the ticket seller to all tickets upon which the one cent tax is levied. Should this ticket be presented to the ticket taker by a person over the age of 12 it will be returned with the request that the purchaser return to the box office and pay the required tax before being allowed to enter the playhouse. This is the first time in the history of Providence theatres that pennies will have to be used at the box offices. Los Angeles, Oct. 31. Local managers here do not antici- pate any decrease in business as a re- sult of the war tax. The Managers' As- sociation is printing half page adver- tisements in all the papers urging the public to patronize theatres, thereby helping Uncle Sam to win the war. Boston, Oct. 31. The theatre managers here who have prices of 15, 25, 35 and 75 cents are laboring under the misapprehension that while they are supposed to collect the extra half cent in war taxes from the public they are not supposed to make a return on the full amount collected. The law reads: "one cent on every ten cents or fraction thereof," and is very plain. The Government gets the extra half cent. Denver, Oct. 31. Fifty film men from this city and nearby towns met at the Albany Hotel last Thursday under the auspices of the Rocky Mountain Screen Club to dis- cuss the method of collection. Harry T. Nolan, president of the club, pre- sided. Opinion as to collection method was divided and need of uniformity felt to keep faith with the public. Domi- nant note sounded by one exhibitor de- (Continued on page 15.) VARIETY'S READY RECKONER For Admission War Taxes