Why we should keep the Richmond Admissions Tax
- The Admissions Tax didn’t stop Movieland from opening its doors within the city limits
A lot of fuss has been made about 7% “Admissions Tax” that the city levies on every event that charges a cover. Movie theatres, nightclubs, sporting events, and performance acts are all taxed. Several people have called for its repeal, including F.T. Rea of Slantblog.
Taxes are unavoidable and bad
I am no fan of taxes and would prefer a tax rate of as close to zero as possible. However, there would be no government without taxes so something needs to be taxed. We pay local taxes on virtually everything – the city funds its expenses through…
- Real Estate Taxes
- Sales tax
- Utilities
- Personal Property Tax
- Meals Tax
- Lodging Tax
- Admissions Tax
- Car Rental Tax
- Etc.
When I look through this list, I see a lot of taxes that I want reduced. A reduction of Sales Taxes would put more money in everyone’s pocket. I despise the Car Tax.
However, several on the list aren’t so bad. I don’t mind a Lodging Tax because mostly out-of-towners are footing that bill. Same goes for the Car Rental Tax. In fact, I wouldn’t mind if some of those taxes were increased because they would have little effect on the taxes I actually pay.
The Admissions Tax isn’t so bad
I would lump the Admissions Tax into the category of not so bad. The city raised $2.5 million last year on the admissions tax, or about $12.50 per resident. My contribution to that fund was somewhere around $3.50 – I spent about $50 on concert tickets at the National and the old Toad’s Place and a Kickers game at U of R Stadium. Other people subsidized this tax for me and reduced my tax bill which is great!
Who made up the rest of my share? People who live outside the city limits. They’re the ones drawn into the city by the great restaurants and shows at the National or the soon-to-be-open CenterStage, paying the 6% meals tax and the 7% admissions tax. Without these taxes, Richmond doesn’t get the full benefit of having amazing projects like CenterStage.
The fact is you would have to spend over $180 in ticket prices PER PERSON to pay more than your fair share of Admissions Tax. That’s 20 separate trips to the movies. Unless you’re a movie theatre addict or attend every Canal Club show, you’re benefiting from this tax more than it’s costing you.
The tax has nothing to do with businesses choosing to locate themselves outside the city limits. The new Movieland is living proof. There isn’t a legitimate music venue or performing arts venue outside of the city limits (save Innsbrook, perhaps). As for the Charlottesville, Austin, and Nashville music scenes as referenced by Slantblog, that’s just a result of a more focus, hard work, and better planning, not a result of admissions taxes.
Admissions Tax repeal = higher taxes for city residents
If the Admissions Tax is repealed, the City of Richmond will need to make up that $2.5 million elsewhere. Where will they turn? Perhaps they would raise the sales tax or utility rates. The truth is we’re going to have to cough up that $2.5 million from somewhere. Out-of-towners might as well help us pay for that bill. So when faced with the choice of a 7% admissions tax (already included in the prices you pay) or a higher sales tax on every dollar you spend, let us know what you’d prefer.
photo by: john.murden
I agree with your logic on the tax. Do you know if the revenue from the Admissions Tax goes into the General Fund or is it designated for Tourism or some other specific activity?
In the City Financial Report, it has it lumped in with other revenue like the sales tax, property taxes, and real estate taxes.
Problem with Admission and Lodging Tax is it hurts the city’s ability to attract the very out of towners who will most likely pay them.
If a cut in the Lodging tax leads to an increase in lodging within the city limits, the difference is not only made up through more rooms being booked but increased revenue throughout the city’s economy.
The same applies with the Admissions tax. By making the cost of doing business in the city prohibitive you drive good businesses to the suburbs and the ancillary businesses that support those anchors follow.
But what you completely miss is the purpose of the tax – to increase government revenue. There’s plenty of waste the city could shed before throwing another tax on this city’s families.
I agree. Let’s reduce waste and start slashing the city sales tax, property tax, and utility rates. Those will directly reduce taxes of city residents and reduce the cost of doing business. Once those are at 0%, we can talk about the admissions tax.
I’d rather see those funds specifically set aside for city beautification, economic development, or tourism…
As a city resident, I make an effort to spend as many dollars as possible in the city. For those people that spend $150++ in admission fees each year, I seriously doubt the vast majority of them say, “you know if it weren’t for that dang admission tax I’d go to a lot more shows.” However, I can certainly agree with your point, Jason, when talking about the Lodging tax.
The issue I have is with small venues (a la Rumors) who get shut down for not paying these taxes. Small bands come to Richmond and play for 20 people and the bands take ALL of the money from the door. You honestly want a band who is living in a van for months at a time to pay 7% of the 75 bucks in gas money they get to the city? How about changing the law so that if it’s under, say, a hundred person venue that this tax doesn’t apply?
@Mike
Here here
With the admissions tax the problem is not so much a matter of consumers objecting to paying it, that’s only a small part of it. It’s much more the effect the tax has had on what shows come to Richmond. It’s about what venues can survive. It’s about Richmond being competitive — the surrounding counties don’t have an admissions tax.
So, Richmond is looking at losing events like the car show that was staged at the Greater Richmond Convention Center a few months ago.
And, just as the good folks at the Byrd Theatre are now on board with the new effort abolish the admissions tax, so is management at Movieland.
To better understand how the tax impacts show business in Richmond, please go here — http://www2.richmond.com/content/2009/jun/30/taxing-tickets-strangling-show-business/.
F.T. Rea’s right. I am still cynical though that the PTB (Powers That Be) will make sure the admission tax is done away for certain enterprises (i.e. Center Stage) but left in place in some form for others so they can keep collecting from peons like me.
Hey, anybody wanna talk water rates? Now, those are truly unjust.
In terms of taxes, I think targeting the city’s floating population, the day commuters, suburbanites, who are financially unconnected to the city core operations, but strain resources, would be a worthy equation. Of course, “regionalism” would make more sense in place of those stress taxes, but in the absence of cooperation, co-opt.
The city should be more aggressive in annexing surrounding communities. Tax and conquest, share the burden and grow. This is systemic.
I suggest landlord licenses as an additional revenue stream instead of admission taxes.
It would also give Code Enforcement/Zoning folks another tool to help gain control over some of the bad absentee landlord situations that Richmond has, including out of control VCU student house parties and general upkeep.
Just look at the mess California is in. The government needs money to run. Let’s make it as painless as possible without shooting ourselves in the foot. I happen to like roads, and police service, and schools, and all sorts of other things these taxes pay for.
@ Mike: I see your point, but once you let the politicians start making exceptions then its hard to stop. Plus, 7% of $75 is $5, I mean c’mon.
@ FT: Look I see your point, and by far I’m typically the most fiscally conservative guy in the conversation. However, I think before we run around demanding a tax be abolished b/c a few shows skip Richmond and/or Henrico/Chesterfield don’t have it we need to look at the trade offs. What do these taxes fund? What services does the ‘Abolish the tax coalition’ suggest be cut from the budget to make up the gap? It’s irresponsible to go around talking about abolishing a tax in any economic situation, but especially now, without considering the services that will have to be cut ( or other taxes raised) to fill that gap. Thus, my original question about what that money is funding.
sure, keep it. richmond city’s fiscal irresponsibility and waste; and consequently higher taxes is the reason i live in Henrico and made sure my wedding caterer was based in the county.
i pay my fair share of this tax at nearby Movieland, the National, Buzz&Neds, and at fan restaurants.
I’d also like to ask if anyone has physically seen CAPS enforce this law. The enforce the laws and shut down the “venues” with an unnecessary display of police force. It makes me leery that this tax money is being well spent when existing tax payer money is WASTED on the mobilization of a whole team of armed men on a boutique run by two pacifist fashion graduates.
“The city should be more aggressive in annexing surrounding communities.”
Unless I’m mistaken, there’s currently a GA-imposed moratorium on annexations, Chesterfield has a special exemption from annexations by the City of Richmond anyway, and Virginia law forbids the incorporation of land with a population density exceeding 1,000 people per square mile, which Henrico does. So unless someone in the GA is willing to go to bat for the right of cities in Virginia to expand their boundaries (on a side note, I heard a rumor recently that Fairfax County was considering incorporation as a single city), Richmond is stuck with its current borders.
Besides, we’re not exactly hurting for undeveloped land. Geographically, we’re only slightly smaller than the District of Columbia, with about a third of the population. We’ve got a lot of room to grow, if we can figure out how to draw people back into the city.
On that note, back to the tax discussion.
@ BCat:
I don’t think it’s about development growth as much as creating a logical direction in operating costs and function, opening up the organizational structure for reforms, and reducing overlap efforts within a shared geographic location. Without a greater regionalism, the tax economy does get distorted, creating the need for these odd revenue streams.
I suppose I would encourage the capitol city to create it’s own precedent, as capitol cities do, based on the necessity and success of annexation practices elsewhere, and challenge the existing laws through reasoned confrontation; forcing the issue on the GA or judiciary is far more likely to produce results or compromises towards this regionalism.
I think it’s an interconnected discussion, but, back to taxes…
(Also, that’s interesting side note about Fairfax; Tyson’s Corner could probably be mentioned as an example as to why annexation and rationale incorporation, in spite of resistance by various taxable interests, is necessary to not building spontaneous concrete disasters.)
Annexation has been forbidden by the General Assembly since the 1970s. On top of that Richmond would need federal approval of any such move, because of the voting rights act.
Bottom line: No matter how sensible it might seem to annex parts of the surrounding counties, or not, Richmond’s borders aren’t going to change any time soon.
I recognize the regional sentiment as being overly idealistic, but I would imagine if it does find opportunity to take hold, it would occur.
@ FT Rea:
How does the Voting Rights Act come into play? I have an idea, but I’ve never heard of it’s application here.
Apologies for the threadjack. Taxes?
Any change in the way Richmond holds elections is still subject to approval from the feds, because of the Voting Rights Act. The district or ward system we have came from a federal edict in the 1970s. The change in the City Charter that Richmonders voted for in 2003, to allow for the direct election of a strong mayor, had to be approved.
Lots of history to this…
“Without these taxes, Richmond doesn’t get the full benefit of having amazing projects like CenterStage.”
The writer kills his argument right there.
http://saverichmond.com/?p=1965
A johnny-come-lately to this discussion, but an interesting one.
Re:
• Tax b/c it funds stuff or no tax b/c it punishes smaller cultural groups. I think the admissions tariff is a hindrance, and considering how arts/culture can reinvigorate neighborhoods, their growth should be encouraged — as should small retail, too. If not abolished entirely, then a reduction, or an abeyance for a period of time, could be a compromise.
• The zoning regs haven’t kept pace with the development of mutli-purpose venues like, for example, bowling alleys or clothing stores that also have in-store performances. When the Firehouse started, we were required to apply for a Special Use permit to run the duration of a play, and for ABC sales. We managed to make it without getting threatened or busted because our paperwork got filed. CAPS suddenly became the Kill Joy Police, and not the vacant/blight SWAT team they should and can be.
• Annexation was restricted in 1980 in the aftermath of the messy and wrongheaded annexation of 23 square miles of Chesterfield County in 1970. Besides, what would Richmond annex now? All that first tier blight on its borders? Let it be Henrico and Chesterfield’s problem — except it’s all of our problem. Which is the point.
http://www.richmondmagazine.com/?articleID=a51b3e3f714f64455e7b69a27ccba040
• Historic Paris, that is what used to be inside the old city walls, what we consider “Paris,” is just 50 square miles, about the same size is Richmond. Size doesn’t matter. It’s what you do with density.
The simple facts are Out of Towners help pay this tax, cities throughout Virginia use this tax and without it a 2.5 million dollar hole needs to be filled. When they cut out the tax, where are they going to cut the budget?
The real stranglehold on the Richmond economy is the Dillon Rule, the GA’s restriction on annexation and the civil right’s act. These have been in place for decades and the results are obvious.
Quick relief could be provided by eliminating the tax on non profits and small venues. No harm, no foul.
the admission tax is an albatross to any promoter or ticket seller,or cover charge in the city..Promoters pass richmond all the time because of this tax.. Why can’t Richmond be the hospitable city that welcomes event and music entertainment.
My vision orf Richmond is it being referred to as the “Front Porch of the South”
Lets don’t be city that tries to TAX the shows that are never going to come!!!
Again, I sympathize with those whom the tax negatively impacts and would like to see it abolished. However, until you are suggesting a new tax or cuts to the budget to offset the gap in revenue a meaningful conversation can’t be had…