Amusement Tax

As the Howard County Council considers a proposal to lower a tax on athletic facilities, one councilman promised last night to eliminate the levy.Councilman C. Vernon Gray has proposed legislation that would lower the admission and amusement tax for indoor athletic facilities for tennis, baseball, basketball, soccer and volleyball from 7.5 percent of gross receipts to 5 percent.The council is scheduled to vote on that measure, co-sponsored by County Executive Charles I. Ecker, on Nov. 3.At a public hearing on the measure last night, Gray said he fTC wants to eliminate the tax on athletic facilities altogether.

Baltimore and other cities in Maryland could impose a 5 percent amusement tax on videotape and game cartridge rentals under legislation being considered in Annapolis.Supporters of the measure say they are willing to extend the taxing authority to any interested counties, as well.But the proposal, before the state Senate, is drawing strong opposition from video dealers and prompting a bit of rebellion.Opponents plan to protest the proposed tax tomorrow by throwing videotapes off the Annapolis City Dock -- into a net so as not to endanger the environment -- in hopes that lawmakers will kill the legislation.

SUPPORTERS OF a resolution to reduce amusement taxes for six businesses in Howard County have failed, to this point, to make a solid argument for the change.The proposal, co-sponsored by County Executive Charles I. Ecker and Councilman C. Vernon Gray, lacks a strong rationale and is too generous for at least one of the establishments that would benefit.Howard County's amusement tax rate already is among the lowest in the area. The state allows jurisdictions to set the rate up to 10 percent.

Howard County officials are proposing to lower a special tax that some athletic facilities say is threatening to drive them out of business -- or into another county.The County Council will hold a public hearing Monday on legislation that would lower the admission and amusement tax rate for indoor athletic facilities for tennis, baseball, basketball, soccer and volleyball from 7.5 percent of gross receipts to 5 percent."We need the amusement tax," said County Executive Charles I. Ecker, referring to the $1.1 million it generates.

Buckling under pressure from the mayor to support a new tax, the Baltimore City Council gave preliminary approval last night to a measure that will cost city parking garage users more money to work and shop downtown.During the special meeting, the council voted to increase the city tax on parking lots and garages by an average of 8 percent -- less than half of what Mayor Kurt L. Schmoke had sought.The council also gave preliminary approval to an amusement tax on pinball and video game operations.

The EnterTRAINment Line President Donald S. Golec will argue in Maryland Tax Court tomorrow that his excursion company pays all the taxes it should."To make it sound like I'm stealing tax dollars is not accurate," said Mr. Golec, 46, of Eldersburg.But the state comptroller's office will counter that the business owes about a half-million dollars in admissions and amusement tax to Union Bridge and Westminster."Nobody wants to see any business fail," comptroller spokesman Marvin A. Bond said.

The dispute between the EnterTRAINment Line and the state comptroller's office over $329,000 in back amusement and sales taxes has implications far beyond the excursion train company based in Union Bridge.The venture's financial health also affects Carroll County's nascent tourist industry; next to the Carroll County Farm Museum, the train, which conducts fall sightseeing tours to Blue Ridge Summit, Pa., evening murder mystery trips and transports Santa himself to Westminster, is believed to be the county's second largest tourist draw.

Anne Arundel County Executive Robert R. Neall, entering his last year of office, has a slim wish list for the county's legislative delegation when the General Assembly session starts next month.Mr. Neall is requesting just one piece of legislation, a bill that would enable the county to apply the amusements tax to instant scratch-off bingo cards that are sold at bingo parlors."We like to take every opportunity to gather new monies into the county," Myron V. Wotring, Mr. Neall's legislative liaison told a gathering of the county's state delegates and senators last night at the annual legislative dinner at the Loew's Annapolis Hotel.

County Councilman C. Vernon Gray, D-3rd, says a 6-month-old, 50 percent increase in the county amusement tax is too harsh and should be repealed.Gray circulated a letter among council members last week,inviting them to join him in sponsoring a resolution that would lower the tax from 7.5 percent back to 5 percent over the next two years.Only Charles C. Feaga, R-5th, accepted the invitation.Gray's resolution would reduce the tax to 6 percent in fiscal 1993 and to 5 percent in fiscal 1994. The fiscal year begins July 1.Even before the county began adding another 2.5 percent to the tax last October, revenue from it had been declining as a result of a slowdown in the economy, Gray said.

A close political associate of Howard County Executive Charles I. Ecker went to bat as a paid lobbyist last month for the promoter of Merriweather Post Pavilion, asking the executive to reconsider his plans to increase the county amusement tax.Mr. Ecker included the tax rise in the budget he unveiled April 16 but delayed its implementation until Oct. 1, after the Columbia pavilion closes for the season. The delay is expected to save the promoter about $150,000.Michael W. Davis, a Columbia lawyer who was co-chairman of Mr. Ecker's transition team and is chairman of a citizens' panel drafting an adequate public facilities ordinance, had written to Mr. Ecker April 12, asking him to discuss alternatives to the amusement tax increase.

Video poker machines would be subject to new licensing fees of $3,000 and exempted from the amusement tax under a proposal that the Baltimore City Council is considering as a way of generating revenue for the city's ailing budget. Currently, the money the machines make is taxed at the 10 percent amusement tax rate. But City Councilman Robert W. Curran says that many of the machines in the city are not registered and the tax is not paid, and that his bill, introduced in February, would ensure that more become registered.

Gamblers sipping beer at the East Baltimore bar have plenty of options. There's a Keno monitor in one corner. A vending machine offers scratch-off lottery tickets in another. Screens show horses running in another. And against one wall stands a bank of four video poker machines. The first three types of games present legal opportunities to win or lose cash. But the row of video poker machines are supposed to be for amusement only: If you win, you aren't supposed to get money back. But seasoned gamblers and even industry representatives say many bars like this one pay out cash to the winners, though such transactions are made in backrooms, or sometimes even bathrooms.

For years, Baltimore has been shortchanged tens of millions of dollars in amusement tax revenue from unlicensed video poker machines in bars and other businesses and the alleged illegal gambling that occurs. City Councilman Robert W. Curran has come up with an inventive plan to beat the businesses at their own larcenous game. He wants to exclude the machines from the state's 10 percent amusement tax and instead charge a $3,000 fee per machine. Now there's a jackpot. Mr. Curran is expected to introduce a bill into the City Council tomorrow that proposes the new fee structure, which he says could generate $5 million or more in revenue for the city each year.

State Comptroller Peter Franchot is warning tavern owners with video poker games, pool tables and jukeboxes that they have until next week to set up a tax account with his office or face possible audit, fraud penalties or criminal prosecution. "Please be advised that the Comptroller's Office will take action to the fullest extent of the law to ensure that you are in compliance with ... state tax laws," Franchot stated in his Jan. 25 letter, a copy of which was provided to The Sun. Revenue from coin-operated games, which are prevalent in Baltimore bars and neighborhood stores, is subject to an amusement tax, a 10 percent tax on gross receipts.

Upset by a recent report that showed that Maryland was missing out on millions of dollars in uncollected tax revenue as a result of illegal video gambling, a Montgomery County lawmaker and candidate for state comptroller announced yesterday that he will introduce legislation to improve regulation of the industry. "What we are faced with here is honest businesses have to pay their taxes but those with illegal machines are allowed to slide by," said Del. Peter Franchot, a Democrat from Takoma Park who has announced that he will run against Comptroller William Donald Schaefer.

Operators of amusement video games in hundreds of corner bars and mom-and-pop convenience stores cheat the state out of $15 million annually in uncollected tax revenue and make illegal payments to players, according to a report released yesterday by the Abell Foundation. The study of the vending machine industry in Baltimore City and Baltimore County found that operators of the games, including video poker, under report their taxable earnings by $63 million to $153 million a year. And that as a result, residents in both municipalities are missing out on millions in possible revenue.

Carroll County has exempted itself from taxing admissions to the Maryland Wine Festival - a county-sponsored event at the county-owned Carroll County Farm Museum. The action will have no effect on admission prices to the wine festival, said Dottie Freeman, the farm museum administrator. The tax amounts to 10 percent of the gate and is collected by the state after the event through the county comptroller's office. In recommending last week that the county commissioners vote to waive the admissions and amusement tax for the event, County Attorney Kimberly A. Millender said the wine festival would be the only event affected.

The Anne Arundel County teachers union released results yesterday of a recent survey showing that voters think education is a more pressing issue than the economy or the county's growth and, separately, would support a tax increase, if needed. The phone survey of 819 randomly selected Anne Arundel voters found that a majority was in favor of a slightly higher income tax rate that would cost the average household an extra $75 a year. The tax-increase question was not specifically linked to education.

Clyde's, which operates restaurants in Chevy Chase and Columbia, should not be required to pay Maryland's admissions and amusement tax on gross receipts, the Court of Special Appeals said yesterday. Music played there is mostly for ambience, and the restaurant does not rely on a cover charge or additional food and beverage sales to pay for the entertainment, the court held in a 2-1 decision. The ruling came in a failed appeal by the state comptroller's office, which also lost bids in Tax Court and Baltimore City Circuit Court to collect the taxes from the Washington-area restaurant chain.

The Robey administration plans to introduce legislation tomorrow night to reduce the amusement tax on farm-related activities - part of a larger effort to encourage farmers to stay in business. The bill would reduce the amusement tax from 7.5 percent to 5 percent for activities on a working farm that are open to the public, or to invited groups for purposes of education, recreation or involvement in farm operations. It covers services such as hay rides, corn mazes, farm tours and picnic-party facilities offered in conjunction with those activities.