Chances are it's going to wind up in court, and as the saying goes...
"You may lose, or I may lose, but the lawyers never do!"
No disrespect intended to any out there in the legal profession, but I'm sure you know the truth of that statement better than anyone.
And rdamon pointed it out pretty well, you can't drop a bombshell like this on a business and not expect there to be trouble.
On another note, I'm curious. Considering the spirited discussion here how many of you have actually ridden the Lehigh Gorge?
Full disclosure, I haven't.
Flintlock76And rdamon pointed it out pretty well, you can't drop a bombshell like this on a business and not expect there to be trouble.
The question is how much of a bombshell was dropped. I think I saw one report that indicated that the railroad had been contacted several times over the past few years about this issue.
At some point, it becomes, "Listen, we told you and you ignored us."
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
Flintlock76On another note, I'm curious. Considering the spirited discussion here how many of you have actually ridden the Lehigh Gorge? Full disclosure, I haven't.
I have not. I saw that JT was sort of on the way from Scranton to Stasburg, so we made a very quick stop, maybe 30 minutes. Glad we did, though. Found out what a great town it is, saw the RR, and we may return some day. On another thread, someone sugested visiting the town, and I am glad we did, albeit briefly.
tree68 Flintlock76 And rdamon pointed it out pretty well, you can't drop a bombshell like this on a business and not expect there to be trouble. The question is how much of a bombshell was dropped. I think I saw one report that indicated that the railroad had been contacted several times over the past few years about this issue. At some point, it becomes, "Listen, we told you and you ignored us."
Flintlock76 And rdamon pointed it out pretty well, you can't drop a bombshell like this on a business and not expect there to be trouble.
It's pretty hard to believe that this issue was totally dormant for a decade. Then suddenly it was a bolt from the blue? Seems doubtful, IMO.
Sounds more like something finally reached a boiling point. Could be personal, as suggested here. Could be a misunderstanding: perhaps assurances were made by someone verbally that the RR was not subject to the tax, but then the town government changed. Lots of scenarios can easily be imagined. But I'm doubting this was a bombshell surprise to RBMN.
OvermodThat's very clear, 5% in Jim Thorpe. What is not yet clear is how much 'outside of' Jim Thorpe. As the statute is written, it seems clear to me that any part of the RT ride outside city limits is not taxable under any statute visible in ecode360.
Jim Thorpe is the county seat of Carbon County. Counties and townships have taxing authority. Is an amusement tax available to the County?
MidlandMike Counties and townships have taxing authority. Is an amusement tax available to the County?
I can find no instance of a county, rather than a municipality, having amusement-tax authority.
Interestingly, most municipality amusement-tax statutes don't contain the language stating that the amusement must take place 'in' the municipality.
Albany, in Berks County, specifically includes 'railroad' under the definition of 'amusement' -- "except a railroad whose rates are fixed and regulated by the Pennsylvania Public Utility Commission."
Overmod MidlandMike Counties and townships have taxing authority. Is an amusement tax available to the County? I can find no instance of a county, rather than a municipality, having amusement-tax authority. Interestingly, most municipality amusement-tax statutes don't contain the language stating that the amusement must take place 'in' the municipality. Albany, in Berks County, specifically includes 'railroad' under the definition of 'amusement' -- "except a railroad whose rates are fixed and regulated by the Pennsylvania Public Utility Commission."
In Illinois, both the City of Chicago and County of Cook have amusement taxes.
Has any out-and-back railfan excursion been hit by either for an amusement tax?
At least two have, as they are in the news for non-payment:
Maryland:
https://www.baltimoresun.com/news/bs-xpm-1995-04-18-1995108085-story.html
Colorado:
https://caselaw.findlaw.com/co-court-of-appeals/1440820.html
Connecticut's law (since repealed) specifically mentioned tourist lines:
https://portal.ct.gov/DRS/Publications/Special-Notices/1991/SN-91-5
Texas specifically mentions railroads:
(v) tour trains and buses, whose primary purpose is to show tourist sights along a route, as opposed to regular transportation;
I'm sure there are tourist lines paying such a tax without fanfare. In the case of Jim Thorpe, it's specifically stated that the passenger, not the railroad, pays the tax. Others are likely the same.
I am not sure, but I think Dave may have been referring to a railfan excursion that is not run on a regular schedule, or even necessarily by a tourist railroad. I am thinking of, for example, when NS used to run the mainline excursions with #1218. Now, maybe those in particular did not return to point A until the following day. But I am pretty sure there have been such excursions that did return the same day.
And aren't there preservation groups and rail clubs who occasionally run non-scheduled trains who make a round-trip on one day?
Did those passengers pay an amusement tax based upon where they boarded?
Anything in other states is irrelevant to a legal proceeding in the state of Pennsylvania. It should be recognized that all these 'amusement' statutes are formulated under a specific statute, the "Local Tax Enabling Act" (PL 1257, No.511, at 53 PS section 6901 et seq. (1982) as amended) and that a number of their provisions are inherently governed by language in that Act. A discussion of some of the purpose and application of the Act around the time it was being invoked in local statutes after 2010 or so (the current Jim Thorpe Article VI replacing an older version around that time) can be found here (read down a bit).
Where I think the 'weasel words' most interesting to see entering precedent will be ... and I do think precedent of potentially multi-state consequence may follow if this gets litigated ... is in the specific boilerplate language used at the end of the section 396-58 'definitions' entry for 'Amusement':
... all other methods of obtaining admission charges, donations, contributions or monetary charges of any character, from the general public or a limited or selected number thereof, directly or indirectly, in return for other tangible property, or specific personal or professional service.
in conjunction with the definition of 'Admission':
The regular monetary charge for any character whatever, including donations, contributions, and dues or membership fees (periodical or otherwise), fixed and exacted, or in any manner received by persons as herein defined, from general public, or a limited or selected number thereof; directly or indirectly, for the privilege of attending or engaging in any entertainment or amusement.
The 'controversy' here is that, since the Act specifically applies only "within the Borough of Jim Thorpe" (and this is very specific language earlier in the definition of 'amusement'), does the cost of a train ride, substantially performed outside the Borough, all reside effectively in the 'permission' to board it? I think that it can be pretty easily agreed that, were the train to sit for several hours in Jim Thorpe without moving, or move up to the town line and back down a few times, you'd see considerably lower interest in LG&N trips or willingness to pay for the privilege -- nowhere near zero, of course, but not what the special gorge trips, such as the bicycle excursions, commanded.
(On the other hand, I do think it would be quite within the Borough's right to tax admission to the same train as, say, a 'tour of historic artifacts' should LG&N require paid tickets for that, without the train leaving Jim Thorpe. That's another hypothetical matter, no different from any other museum within Borough limits.)
As I mentioned on RyPN a while back, there is a 'ringer' in Jim Thorpe's statute that is explicitly not required under PL 1257: the complete immunity to 'amusement tax' if the full proceeds of admission are collected by a nonprofit organization (396-60 B). It should be noted that any 501(c)(3) organization automatically qualifies here ... including most railroad museums and quite a few 'friends' groups. Since Andy has gone on record as saying the LG&N is conducted as 'a labor of love' it would not be difficult for him to coordinate charitable contribution "in the amount of the LG&N receipts" to appropriate organizations, or in fact to establish his own ... shall we say, by way of example, to give 2102 a priority restoration? (The applicable law is silent on 'nonprofits' not being subject to control by an agency selling tickets within the Borough)
Lithonia OperatorI am not sure, but I think Dave may have been referring to a railfan excursion that is not run on a regular schedule, or even necessarily by a tourist railroad.
You're probably right - I overlooked that qualification in his question.
Those also may have been run under some 403b or other non-profit org that bypassed taxation
daveklepperAmusement connotes a lack of seriousness, a seance of lightness, and legal terms should have some relevevance to reality. I'll stay with my English, thanks.
Legal terms are there for consistancy, so all cases can be treated equally. Substituting your own preferred meanings will not win any cases.
OvermodAnything in other states is irrelevant to a legal proceeding in the state of Pennsylvania. ... Where I think the 'weasel words' most interesting to see entering precedent will be ... and I do think precedent of potentially multi-state consequence may follow if this gets litigated ...
Why are legal proceedings in other states irrelevant to Pensylvania, but Pensylvania's legal proceedings are relevant to other states?
daveklepperI think once the Surface Transportation Board gets involved, the Town's game will be over, because the Town is clearly labeling a transportatoin service a common-carrier railroad is providing as an "amusement."
The Colorado case previously referenced shows that a state can authorize a tourist type tax on tourist lines even though they may be common carriers. STB does not involve themselves in tourist operations. I don't believe they are even involved in Brightline, which is an intrastate regular passenger operation.
MidlandMikeWhy are legal proceedings in other states irrelevant to Pensylvania, but Pensylvania's legal proceedings are relevant to other states?
Because anything taking place regarding a Pennsylvania law incorporated into borough statutes in Pennsylvania will be entirely adjudicated in Pennsylvania.
That doesn't mean that other states and statutes won't be considered ... only that they don't apply in Pennsylvania. And for them to do so, Pennsylvania would have to enact them. Law in any other state is not binding there.
Should Pennsylvania decide that tourist railroads are, or are not, subject to amusement tax, other states interested in additional revenue may choose to enact or amend their own statutes accordingly. But they would only be using the Pennsylvania law as a guide; they too would be enacting or amending their own applicable law.
Not sure why this wasn't clear.
My question was poorly stated. I was really referring to the previous post, and referring only to Chicago departure and return railfan trips. But my mistake did produce a useful and interesting and possibly valuable discussion, and I am glad to have all the information produced.
I wonder if the Supreme Court would confirm local courts and legislation that defines enjoyment and entertainment and amusement as identical services to the public. A lot of you would answer "of course." But I still wonder.
I doubt that the Supreme Court would even consider such a case. Definition of terms in a statute is viewed as a legislative function and outside the purview of the court.
CSSHEGEWISCHI doubt that the Supreme Court would even consider such a case. Definition of terms in a statute is viewed as a legislative function and outside the purview of the court.
You're killing me. Over 200 years of constitutional interpretation says different. Much of the timeless topic of 'judicial activism' is concerned precisely with the interpretation and application of statutory 'language' under the Constitution.
However, here the Supreme Court of the United States isn't what he'd be talking about, it would be the Supreme Court of Pennsylvania.] And that Court would only be reached on appeal (relevant rules here) and even then could refuse to grant certiorari.
Personally I see no applicability of Federal law (which is a separate court system) as there's no impingement on railroad operations per se. being imposed by the tax, but I'd certainly listen to arguments to the contrary.
It is also true that Jim Thorpe Borough has the right to review their statute and, as in Albany, PA, put in a special definition concerning railroads. This would likely have to include the specific language on exception in Albany's statute, of course, and I expect the precise interpretation of the subject to be covered in the initial court case concerning the 'tax bill due', at least if the lawyers representing RBMN are on their toes ... and can't prevail on other grounds first.
Albany Township, Berks County, PA contains the unincorporated community of Kempton, which is the home of the Wanamaker, Kempton & Southern tourist railroad: https://www.kemptontrain.com/
Also part of world-renowned Hawk Mountain Sanctuary for raptor conservation is in Albany Twp.: https://www.hawkmountain.org/
I have no knowledge which - if either - collects an amusement tax. But the Township has the paperwork for it:
http://www.co.berks.pa.us/Muni/Albany/Pages/PublicInformationRequestForm.aspx
- PDN.
OvermodNot sure why this wasn't clear.
What wasn't clear was why your two referenced remarks contradicted each other.
OvermodThat doesn't mean that other states and statutes won't be considered ...
That response helps to clear up the contradiction.
MidlandMike Overmod Not sure why this wasn't clear.
Overmod Not sure why this wasn't clear.
However, just as other state Attorneys General watch what happens in other states and then think about applying that in their own (through new or amended legislation) other states that have municipalities with tourist railroads may be looking with interest to see how they, too, might best be able to impose a valid 'amusement tax' law which local municipalities might use as enabling legislation for statutes like Jim Thorpe's section VI that would be wholly enforceable.
Note that, technically, that is true whether or not the course of this matter actually changes anything statutorily, in Pennsylvania. Pennsylvania law wouldn't bind any other state, and Pennsylvania precedent would be useful only as a model example.
Knowing that, I didn't think what I said actually contradicted itself, but that's a language problem on my part, not a comprehension problem on anyone else's.
But is not the logical first line of defense of the railroad's position something that could go to the Federal Supreme Court?
That the enjoyment (whether or not amusement) is at the Gorge, and that the railroad only provides transportation to and from, and thus the statutes are not applicable because they apply only to the enjoyment, which is outside the Town?
daveklepperBut is not the logical first line of defense of the railroad's position something that could go to the Federal Supreme Court?
I think it's unlikely that there is some Federal principle that would allow 'appeal' over a decision on state law made in state courts on this issue. In the past, where that has happened, there is some explicit Congressional legislation, itself passed on constitutionality, that overrides state precedent. One example (not entirely comparable, but useful as a model) is the passage of civil-rights legislation in the 1960s intended to eliminate things like the poll tax and the 'separate-but-equal' laws that so proliferated after Plessey v. Ferguson. I don't think it likely that any Federal law would override provisions of Pennsylvania PL1257, and in the absence of something comparably specific I doubt a Federal interest -- say, a supposed violation of some kind of civil right -- could be cobbled up sufficient for the Supreme Court to grant cert.
The statutory language has been carefully engineered, in Jim Thorpe's "new" amusement-tax statute (post-2010) to try to make the whole of the 'entertainment' predicated on the fact of admission. A somewhat contrived example would be a circus largely provided on land outside the Borough, but with ticket and gate access solely within it. Since the only 'legal' way to partake of the entertainment is to do so within the Borough, and the town has the right under PL 1257 to tax 'at the point of entry' the town might argue that the fact of admission necessarily precedes any subsequent 'amusement'.
The railroad has land to develop near Jim Thorp, could build facilities on that land that could compete and even outstrip Jim Thorp as a tourist center, and run trains between that location and the Gorge without going through Jim Thorp, if they wishes to do so.
The fact remains that they earn their income from the freight railroad business, and they could also exit the passenger train business.
daveklepperThe railroad has land to develop near Jim Thorpe, could build facilities on that land that could compete and even outstrip Jim Thorpe as a tourist center, and run trains between that location and the Gorge without going through Jim Thorpe, if they wish to do so.
If Andy Muller wants to set up for such a development, or find partners to do so, he will; you may want to send him a confidential letter (NOT e-mail) including some of the specific items involved. I'd be pretty sure, though, that the opportunity cost of such a project would be ridiculously high considering the other places he could put the financing that would be involved.
The other very significant risk is that, if he were to build out a PUD, Jim Thorpe Borough may move to expand its town limits to include the development, or formally annex it. We had a number of instances of this in the Memphis area, including both the City of Memphis 'grabbing' high-end subdivisions and shopping-mecca areas and the City of Oakland getting several miles of a U.S.Highway and implementing their trademark speed traps on it. The more effective the project were to be at appealing to tourists, the more it would also appeal to local officials, and the taxpayers behind them.
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Maybe 20 - 30 years ago I believe there were several boroughs in Pennsylvania that annexed land from adjoining townships. My understanding is that the state statutes were changed to prevent - or at least make more difficult, such as by requiring an affirmative vote from the township - such land grabs.
OvermodI thought it would be almost self-evident that only Pennsylvania law, and not any other state's law, would apply when arguing about the terms or application of the law in Pennsylvania.
I have been around legal matters enough to know what you were saying in the original post. It was more about what you didn't say.
Overmod However, just as other state Attorneys General watch what happens in other states and then think about applying that in their own (through new or amended legislation)...
This fills in what you didn't say, and I don't have any more issue with any contradiction.
Regarding moving the tourist train operation out of Jim Thorpe; any town or township he moves to should have the same taxing authority. Additionally, a rail line has some unique considerations. Most "amusements" are located in a single spot. A rail line may travel thru several local jurisdictions, and may be subject to those taxes in each of them. All of them legitimatly provide town services, such as police (eg, investigation of Western Maryland Scenic brass thefts), fire (eg., Durango & Silverton forest fire), EMT (eg., I have been on trains where people had to be medically evacuated).
I also want to address what some one said to the effect that other taxes like property taxes should take care of any local services provided to tourist. I live in rural northern Michigan, and this month a local township EMT service had to be disbanded because they lost their required paid professional (the rest were volunteers), apparently because he left for a good paying job. Townships are also having problems with trying to retain volunteer firemen and pay the thousands of dollars to train and equip them. Some have referred to it as a looming crises. I have no problem with local governments trying to get reimbursement for services provided for mass tourism. I also want to see tourist trains thrive, but they should not expect a free ride.
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