PO Council to Vote on Admissions Tax

Correction: A story Sunday in the print version of the Kitsap Sun on a proposed admissions tax for Port Orchard listed the wrong amount of revenue the tax could generate. The correct amount is around $85,000 per year, of which Regal Cinemas would pay around $81,600 annually.
Incorrect information on businesses affected was listed. Movie theaters, carnivals and establishments charging a cover fee for entertainment would be subject to the tax. Schools, sporting events and nonprofit organizations would be exempt.
Poulsbo was omitted from the list of local jurisdictions that currently charge admission tax.

PO Council to Vote on Admissions Tax

By Chris Henry
PORT ORCHARD

The Port Orchard City Council on Monday will vote on an ordinance to establish a 5 percent admissions tax that is projected to generate approximately $85,000 annually. The idea has been under discussion since August.

Background on the city’s admission tax dates to 1989, when Kitsap County was proposing to impose its own 5 percent tax. If cities located in a county do not impose an admissions tax, the county can collect within corporate limits.

The cinema on Mile Hill, now called South Sound Cinema 10, came to the city and asked to be incorporated. The cinema worked with the city to institute a one-tenth of one percent tax that was then seen as more fair for small business owners. But this spring, the city learned that one of the original owners of the cinema had sold out to Regal Cinemas, which, according to the city, prices tickets in Port Orchard the same as in other locations that are under a 4 or 5 percent admission tax.

Movie theaters, carnivals and establishments charging a cover fee for entertainment would be subject to the tax. Schools, sporting events and nonprofit organizations would be exempt.

Of the Port Orchard businesses potentially affected by the tax, South Sound Cinemas would generate the most revenue for the city, a projected $81,600.

Councilman Bob Geiger, who owns the Plaza Twin Cinema building, was the lone council member expressing opposition to the idea at the council’s Nov. 13 meeting.

Geiger has leased the building to Bainbridge Island-based Far Away Productions, which plans to renovate the historic theater, set to open in December.

“As you might expect, we’re opposed to the tax,” said Jeff Brein, managing partner of Far Away, during an interview separate from the council meeting.

Brein said pressures of the cinema industry make it hard enough for small, independent theaters to realize a profit, without the added burden of an admissions tax. He said cinemas such as the one he plans to operate are an asset to downtown areas such as Port Orchard in need of an economic boost. And he said the tax is discriminatory.

“Why not tax hair cuts?” asked Brein rhetorically.

Geiger argued that the tax affects a small number of businesses whose potential loss of revenue would have a negative effect on Port Orchard’s economy.

Kitsap County, Bremerton and Poulsbo charge 5 percent admissions tax for events, and 4 percent for theaters. Bainbridge Island, Gig Harbor and Pierce County do not charge admissions tax.

The council earlier had looked at imposing a 1 percent amusement tax, which would have yielded just under $85,000 in the five year period from 2002 through 2006, as compared with the $424,186 in revenue that would have been generated during that period with a 5 percent tax.

With the exception of Geiger, the council settled on the 5 percent by consensus. The formal vote will take place Monday.

“We’ve beat this thing around. Let’s put it to bed,” said council member Carolyn Powers.

9 thoughts on “PO Council to Vote on Admissions Tax

  1. Have you purchased popcorn, candy, or a soda at the movies in recenty years? Quite expensive and we pay sales tax on those high prices. Isn’t that enough tax?

    By the way, it cost $40 to get tickets for a family of three, a tub of popcorn to share, and a small soda for each of us.

    I don’t go to the movies much anymore.

    Regards,
    Kathryn Simpson

  2. Where are the letters equating this raise in taxes with the Port of Bremerton tax increase? I mean, why was this not an election issue? Could it be that everyone in the Council and running for council (except Geiger) is pro tax on the movies? Yep, elected officials are going to let people make decisions on taxes. NOT!

    Kathryn,
    What gives? We agree on something? 🙂

  3. dahl,

    Even a broken clock is right twice a day and if you have two clocks both off on their timing, they will coincide, ever so briefly, every once in awhile… eventually.(smile)

    Regards,
    Kathryn Simpson

  4. This looks like the crux of the matter: “…original owners of the cinema had sold out to Regal Cinemas, which, according to the city, prices tickets in Port Orchard the same as in other locations that are under a 4 or 5 percent admission tax.”

    Apparently, the city officials think the tax break should somehow be reflected in the ticket price.

    How does the tax show up, if at all, on the customer’s receipt? Is it simply hidden in the price paid by the customer? If so, more of the ticket price is profit in Port Orchard than in the other locations. (Yes, Kathryn, this means I go to the movies very rarely. I couldn’t even guess what the cost of a ticket is, much less tell you whether the amount of the tax is apparent to the customer.)

    Unless the cinema owners “eat” the tax increase, I suppose it would be passed along to the customers. If it’s not separately listed on a receipt, would the ticket price become higher in Port Orchard than other locations?

  5. It’s ridiculous. Effectively a “Movie Tax” shouldered by community members (to include teenagers) having good clean fun.

    A sin tax with no sin. Where’s the 80K plus going to go. Staff overhead at city hall?

  6. Bob – Having talked with Jeff Brein, owner of the soon to open Orchard Theatre in the old Plaza building, I understand (correct me if I’m wrong Jeff) that cinema owners have no choice but to pass the increase in their cost on to the customers. Brein talked at length about how difficult the industry is. Theaters actually make very little on ticket sales because most of what you pay for a ticket goes back to the studios. So — no surprise here — Brein said, they rely on concessions to make their profit. After he explained it to me I felt a little less irritated about having to pay a small fortune for popcorn.

  7. Interesting last sentence, Chris. Because the movie price doesn’t bother me nearly as much as the concession prices.

    I have to wonder… if they cut the concession stand prices, wouldn’t they sell a lot more product and (I think) make a lot more money on concessions and make the customers happy too (who would then return more often to buy again)???

    Regards,
    Kathryn Simpson

  8. Chris, I presumed the additional tax would be passed along to the customers, if possible; but would that mean the ticket will cost more in Port Orchard compared to Silverdale when the cinemas are owned by the same corporation? If so, it would be a strange situation, unless SK customers decide the savings in motor vehicle fuel make it a good deal anyway.

  9. … that old theater is interesting and worth the ticket price if the show is good…..especially compared to the cost of driving from Port Orchard to Silverdale or Poulsbo.
    Chris…is the popcorn fresh?

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