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Theater owners oppose D.C. tax on concessions

Washington Business Journal by Michael Neibauer, Staff Reporter
Wednesday, October 26, 2011, 5:16pm EDT – Last Modified: 5:56pm EDT

 NATO is flat out rejecting Mayor Vincent Gray‘s proposed 5 percent tax on movie theater concessions. Whether the organization is gearing up for battle, that’s another matter.

We’re talking about the D.C.-based National Association of Theatre Owners and its reaction to our report that Gray wants to boost the sales tax on movie theater concessions by 5 percent to subsidize a new movie theater east of the Anacostia River and to award production companies incentives for filming in the District.

The tax plan, said Todd Halstead, NATO’s deputy director of government affairs, is “misdirected and unfair” and the “wrong way” to meet either of Gray’s goals.

“Movie theaters share a portion of ticket revenue with the studios,” Halstead said. “They operate on thin margins. Why would someone want to open a theater if their main source of revenue is subject to a tax?”

In any case, Halstead said, hiking the concessions tax will reduce concession purchases, leading to decreased sales and less tax revenue for D.C. coffers. And, he said, movie theaters draw a wide range of film fans — meaning, the tax is regressive as it will hit poor movie theatergoers the hardest.

“Going to movies is one of the most affordable forms of out-of-home entertainment,” Halstead said.

Perhaps, if you skip the popcorn.

The legislation, introduced by Council Chairman Kwame Brown on Gray’s behalf, was referred to the Small and Local Business Development Committee, chaired by Councilman Vincent Orange, D-At large. It is unclear whether the Finance and Revenue Committee, chaired by the tax-averse Jack Evans, D-Ward 2, will get a shot at it as well.

Source: http://www.bizjournals.com/washington/blog/2011/10/theater-owners-oppose-dc-tax-on.html

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