The owners of the EnterTRAINment line said they will close the business if a bill exempting them from paying more than $300,000 in back amusement and admissions taxes fails.
"If that bill does not pass, we will close, period," said Steven Hamilton, one of the rail line's five owners. "I promise you, we will be gone."
Mr. Hamilton, one of his partners and Carroll Republican Sens. Larry E. Haines and Timothy B. Ferguson were in Annapolis Friday urging the Senate Budget and Taxation Committee to approve a measure that would exempt EnterTRAINment from the tax. Mr. Hamilton said the firm would operate the passenger service in another state if the bill is not approved by the General Assembly. The bill, introduced by the senators, says the rail line is transportation and not an entertainment venture subject to the tax.
"These are real businessmen," Mr. Ferguson said. "What this tax is, to them, is discrimination against entrepreneurship."
EnterTRAINment has been fighting a ruling from the Maryland comptroller's office that it owes $329,056.93 in sales and amusement taxes, penalties and interest that accrued from Aug. 1, 1989, until Sept. 30, 1991.
The current owners -- who bought the company in April 1993 -- have said they were unaware of the tax when they purchased the business. In addition, as Mr. Hamilton and his partner Donald S. Golec told the committee yesterday, they have said the tax violates regulations by the Interstate Commerce Commission prohibiting discriminatory taxation of railroads.
Officials from Westminster and Union Bridge, the two municipalities owed the tax, called the bill a favor for a single taxpayer.
"This represents nothing more than a bailout for a special few but higher taxes for almost 16,000 citizens in Westminster and Union Bridge," Westminster Mayor Kenneth A. Yowan testified.
The tax is authorized by state law, but municipalities decide whether to impose it. It is collected by the state.
Mr. Yowan said the bill would "rewrite history because it seeks not only to exempt the rail line from current and future taxes but also to erase the past levy. Mr. Yowan said the amount owed Westminster -- the bulk of the levy -- equals about 12 cents on the city's tax rate.
Sen. Barbara A. Hoffman, the Baltimore Democrat who chairs the committee, appeared reluctant to get involved in what she called a dispute better suited for tax court.
"The committee has a real problem interposing itself into a matter now pending before the tax court," Ms. Hoffman said. "It's a slippery slope one starts sliding down when profit-making enterprises don't want to pay taxes."
A hearing on the issue scheduled for Thursday in Maryland's Tax Court was moved to April.
Mr. Hamilton said his company could not afford to take the matter any further in court.
According to him and Mr. Golec, the company has about 40,000 customers a year and generates revenues of about $1 million. But its operating costs are close to $1 million.