Railway Preservation News
https://www.rypn.org/forums/

"Amusement Taxes" and Excursion Lines
https://www.rypn.org/forums/viewtopic.php?f=1&t=43827		 Page 1 of 5
Author:  Alexander D. Mitchell IV [ Wed Oct 16, 2019 12:25 pm ]
Post subject:  "Amusement Taxes" and Excursion Lines
After having recently discussed the subject on other forums, and in the light of the announced shutdown of the Lehigh Gorge Scenic RR in Jim Thorpe, Pa. over the issue, I believe this warrants historical and current discussions in this forum.

Should your excursion operation or railroad museum be subject to a local or state "entertainment tax"? Is your operation paying such taxes currently? Why or why not?

I have read direct allegations that the assessment of such taxation, often retroactive, has led to the shutdown of other excursion operations in years past. Among them were supposedly/allegedly the Penn View Mountain Railroad (Sloan Cornell's first operation east of Blairsville, Pa., shut down around 1974) and the Ocean City Western out of West Ocean City, Md. I think it is extremely likely that if I flip through back issues of the Steam Passenger Service Directory, I could find other operations where such taxation may have played a part in the shutdown of operations--I just flipped through a couple 1970s issues and have grave suspicions about some of them. And I have no doubt this was an issue elsewhere but simply never publicized. Or it may have tipped the ink from black to red.

Now, even as an ardent anti-taxation libertarian, I can make justifications for the assessment of such taxes against SOME, if not most, excursion operations operated as or by a for-profit operation. There is literally no way that you can make the case that an excursion that features a theme park at one end, roving troubadour singers playing for the folks, a "bar car," a running commentary on the speakers, and/or the Wild West "train robbery" complete with horse-riding "bandits" is NOT "entertainment." And operations like this DO incur additional traffic, costs, etc. upon places like Durango, New Hope, Strasburg, or even little Clarkdale, Arizona (which had to put up public signs directing people to the "Train Depot").

Apparently, the usual claim made to try and "exempt" such an operation is that it's a "transportation" or "railroad" operation subject to Federal and STB oversight. There are two problems with that: 1) I can only come up with perhaps 1-2 such railroads nationwide that can make ANY claim whatsoever to being a legitimate "transportation alternative" for passengers (the Grand Canyon Railway being one); and 2) many of these railroads are functionally insular and not connected to the general system (White Mountain Central, Tweetsie, Durango & Silverton, etc.).

Now, there's a legitimate dodge for many such operations: Non-profit status. This covers, to my eye, most rail museums whether or not they have train rides. But even a few of these cross over a bit, hosting or being a venue for such events as concerts, food events,and the like. But "rental income" is probably a separate line.

And the issue of such taxes being assessed retroactively, with the shock of a big bill all at once, is another topic of discussion entirely, perhaps better carried out on politically-tinged forums.

I would say that a $100K bill suddenly for a major operation like the Strasburg, Grand Canyon, Reading & Northern, etc. is much more of a nuisance than a huge financial hit, and it's almost obvious in the case of the LGSR/RBMN that this has become a personal tiff and vendetta between RR president Andrew Muller and the community officials.

Thoughts/comments?
Author:  Chuck Richards [ Wed Oct 16, 2019 12:48 pm ]
Post subject:  Re: "Amusement Taxes" and Excursion Lines
That sounds like yet another example of government out of
control. Heavy handed retroactive taxation. I seem to recall
that this nation was founded in part because of problems with excess taxation.

If you ask me, the retroactive part sounds like possibly an underhanded
way to make certain rail establishments disappear.

The bigger question to ask in situations such as these is:
"Who's in control here?" Meaning, does government control the
people, or do people control their government?

"Of the people, by the people, and for the people" is how I remember it's
supposed to be. Not heavyhanded taxation.
Author:  Tyler H. [ Wed Oct 16, 2019 2:42 pm ]
Post subject:  Re: "Amusement Taxes" and Excursion Lines
"Of the people, by the people, and for the people" doesn't exclude the possibility of a majority of those people voting in favor of taxation they approve of. And I would think ideally, any taxes levied on "the people" and businesses should then be reinvested by the government in efforts to vitalize or support "the people" and the communities they live in. If you'd rather not contribute to that reinvestment, then we should perhaps consider alternate sources for that reinvestment...

But I digress. I can see how this may be a source of frustration for those of us in the railroad preservation sector. But I don't think it needs to turn into a debate on the politics of taxation in general.
Author:  Alan Maples [ Wed Oct 16, 2019 3:16 pm ]
Post subject:  Re: "Amusement Taxes" and Excursion Lines
This can be a complicated issue involving arcane legal questions. It is reasonable to expect the business (railroad or otherwise) to interpret the relevant statutes in the manner most favorable to the business, and it is reasonable to expect the taxing jurisdiction to interpret the statutes in the manner most favorable to them.

The issue of amusement taxes contributed to the demise of the EnterTrainment Line in Union Bridge, Maryland, many years ago. In this particular case, the excursion operator was not a common-carrier transportation company, although it did operate over the tracks of a common-carrier railroad. As I recall part of the issue had to do with the role of amusement taxes vis-a-vis state sales tax.

https://www.baltimoresun.com/news/bs-xpm-1995-04-20-1995110156-story.html

Alan Maples
Author:  Alan Walker [ Wed Oct 16, 2019 4:32 pm ]
Post subject:  Re: "Amusement Taxes" and Excursion Lines
In the case of Old Pueblo Trolley, Inc., our street railway was considered to be a transportation provider. We are not a common carrier, but operated on our own line authorized by a city issued charter exclusively in the public right of way. We pay local sales and property taxes-the right of way was nontaxable as we did not own the land and were exempted from use fees.
Author:  Ron Goldfeder [ Wed Oct 16, 2019 9:11 pm ]
Post subject:  Re: "Amusement Taxes" and Excursion Lines
This should be a warning to all that they should be aware of any and all taxes they may be subject to and have a lawyer, hopefully a member doing it for them, check on this to avoid such problems down the road. Ignoring these issues won't help. Being informed, like the tax or not, is being prudent and responsible. If there is a question on if it applies to you the thing to do is get a decision from the taxing authority, hopefully a favorable one, that can be filed away for future use should it come up later.
Author:  Andy J [ Thu Oct 17, 2019 12:38 am ]
Post subject:  Re: "Amusement Taxes" and Excursion Lines
I am far removed from that area, and having never visited it, is the railroad "the" major tourist draw to the area?? If so, their will be a lot of hurt small businesses that cater to the tourists.
This could be a case of killing the goose that lays the golden egg.
Author:  co614 [ Thu Oct 17, 2019 7:23 am ]
Post subject:  Re: "Amusement Taxes" and Excursion Lines
Andy Muller has done very well with his shortline and he also certainly vastly upgraded the Jim Thorpe product since taking over from the late George Hart.

I consider Andy a friend and have long admired his hard work and foresight.

There are 2 sides to this story in that the town of Jim Thorpe recently paid Andy's railroad $ 600,000 + dollars to provide a " flagger" during road construction. Therefore the town thought it should be a 2 way street and the tourist railroad should pay its share of the amusement tax ( as do the other tourist vendors in the town) as only fair both to the town and the other 19 vendors all of whom are current with their payments.

I hope that Andy will take a deep breath, count to 10 and reconsider.

Hope springs eternal. Ross Rowland
Author:  Alexander D. Mitchell IV [ Thu Oct 17, 2019 10:16 am ]
Post subject:  Re: "Amusement Taxes" and Excursion Lines
co614 wrote:
the town of Jim Thorpe recently paid Andy's railroad $ 600,000 + dollars to provide a " flagger" during road construction.


We're definitely in the wrong line of work.

I mean, as boring and monotonous as that job appears, if they're paying that much, HELL, YEAH I'll do it. (It's entirely conceivable that Muller has raised questions about that expense as part of this "feud.")

Literally just down the road from me, however, a contractor just installed a new system two days ago consisting of radar-triggered traffic lights with wireless communication between one another, complete with rail-crossing-style gates, to replace flaggers during a two-week one-lane restriction on a bridge overhaul, thankfully on a lightly trafficked local road (the "old highway").

People keep complaining about automation and mechanization taking away low-wage jobs like fast food clerks. I would say this is one job many workers would be most happy to have automated, especially in winter or blazing summer heat.
Author:  jayrod [ Thu Oct 17, 2019 10:22 am ]
Post subject:  Re: "Amusement Taxes" and Excursion Lines
Here in Ohio, amusement/admissions taxes are a sales tax levied at the local level so they aren't in effect everywhere. If you're going to sell tickets within a municipality or some other kind of local governmental jurisdiction, check both with the local tax collector and a tax attorney to see if an admissions tax is in effect and if it applies to you. I think in most places in Ohio with admissions tax, non-profits are exempt. For-profits, not so much. Though the percent of the ticket price is generally low, you can wind up with a big unexpected bill of back taxes with penalties and a bunch of paperwork if you're caught unaware. Moral is: Do yer homework first.
Author:  R.L.Kennedy [ Thu Oct 17, 2019 2:40 pm ]
Post subject:  Re: "Amusement Taxes" and Excursion Lines
Are there any tour buses operating locally? Do they pay amusement tax?
Author:  parktrains [ Thu Oct 17, 2019 5:19 pm ]
Post subject:  Re: "Amusement Taxes" and Excursion Lines
Personally, if they'd approached from the angle of "Hey, we've got all these other local vendors paying this tax and we need to discuss getting you on board too" then fine.

If you show up on my doorstep demanding payment for retroactive years of taxes for something you've arbitrarily decided I need to start paying without warning, then I'd tell you to go to hell too.
Author:  hadder [ Thu Oct 17, 2019 6:56 pm ]
Post subject:  Re: "Amusement Taxes" and Excursion Lines
A railroad needs to be very careful walking the line between 'excursion' and 'transportation'. If fully classified as 'transportation', that opens up a new list of FRA regulations, mainly part 238 which requires collision posts, 40 year truck inspections, and annual inspections by a 3rd party outside contractor.

I'd much rather pay the amusement tax than deal with part 238.
Author:  MD Ramsey [ Fri Oct 18, 2019 10:46 am ]
Post subject:  Re: "Amusement Taxes" and Excursion Lines
Yes, getting into the passenger transportation business, or moving passenger from point A to point B for the purpose of transportation (intercity, commuter, short haul passenger) is a different world from the safety regulatory standpoint, than an excursion/tourist/historic railroad. Proclaiming yourself as a "passenger/commuter" railroad does not make it so......

MD Ramsey
Author:  6-18003 [ Fri Oct 18, 2019 5:45 pm ]
Post subject:  Re: "Amusement Taxes" and Excursion Lines
It sounds like Andy will still be using Jim Thorpe as a stop but not as a start/end point. I imagine he will handle ticket sales elsewhere. Interesting to see if that is enough to skirt the ordinance.
Page 1 of 5 All times are UTC - 5 hours [ DST ]
Powered by phpBB © 2000, 2002, 2005, 2007 phpBB Group
http://www.phpbb.com/