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Jim Thorp's Mayor and the Amusement Tax

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Jim Thorp's Mayor and the Amusement Tax
Posted by daveklepper on Saturday, October 19, 2019 1:06 PM

Someone should simply inform the Mayor that the scenery is providing the "amusement" and that the railroad is providing transportationi to and from the scenery.

Does he propose to tax sight=seeing buses that are based in his city?

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Posted by zugmann on Saturday, October 19, 2019 1:08 PM

daveklepper
Someone should simply inform the Mayor that the scenery is providing the "amusement" and that the railroad is providing transportationi to and from the scenery.

It's a symbiotic relationship.   And god knows the RBMN has taken a lot of state grant money over the years.

  

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Posted by BaltACD on Saturday, October 19, 2019 4:10 PM

zugmann
 
daveklepper
Someone should simply inform the Mayor that the scenery is providing the "amusement" and that the railroad is providing transportationi to and from the scenery. 

It's a symbiotic relationship.   And god knows the RBMN has taken a lot of state grant money over the years.

State Grant money that benefits Jim Thrope by having the RBMN continuing to serve the town - be it for 'sightseeing trains' or handling freight for the town's businesses.

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Posted by Flintlock76 on Saturday, October 19, 2019 4:38 PM

We've got a thread about the Lehigh Scenic closing under "General Discussion," but no matter.

Grant money?  Suffice to say there's the old saying, "For free, you take.  For pay, shop around."  Anyway those grants were awarded because the state believed the Reading and Northern would be good for the economy of the areas it covers and so it proved, it was money well spent.

At any rate I'd say Jim Thorpe needs the railroad a lot more than the railroad needs Jim Thorpe.  

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Posted by daveklepper on Saturday, October 19, 2019 8:52 PM

And lots of railroads have run excursion trains.  There is no historical precedent for an amusement tax on a common-carrier railroad.  The New Haven even ran a yearly Themes River Regatta observation train.

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Posted by Overmod on Saturday, October 19, 2019 9:13 PM

It is highly instructive to see what the 'official' preservation community, containing a fair number of people with firsthand experience in operating tourist attractions in communities, have had to say on this discussion so far.  I found it particularly interesting that many of them think it's appropriate for an operation of this kind to pay amusement tax of a reasonably-derived amount.

I can't help but think this is related to those hundreds of thousands of dollars spent on 'flagging' and whether the city wants to recoup its share of uncompensated 'improvements'.  The 'retroactivity' discussion adds to a sense that retribution is in the mix somewhere.  Does anyone have access to town meeting records to see how this was discussed?

Situations like this, and the likely 'politically-adept' solution to ones like this, sometimes remind me of a golfing story my father told.  He had gone out with a couple of the resident mafiosi with the stakes being 'a drink a hole'.  At the end of the 18, my father had won something like 11, the others, say, 7 (I don't remember the exact numbers, and there may have been ties; it doesn't matter to the real point).  Up to the clubhouse bar they went, golf being thirsty work, and as they went my father said "Well, that's 11 to 7, so I guess you owe for four drinks."

"Like hell!" said the other.  "You buy 7 and I'll buy 11."

And so it went ... somewhat catastrophically for some of the little gray cells, but certainly 'correct'.

What's present in Jim Thorpe is the attempt to get as much revenue as they can to improve the town, without having to get it from local taxpayers.  "Amusement taxes" do this nicely, especially when they soak nominally well-heeled absentee owners, with the logic being (as the tourism guy said in the news video) that parking, some security, in all probability parking ticketing and a towing racket, and pointedly, road maintenance are all part of tourism draw and it's fair to charge outsiders for that ... indirectly.

Personally, I think it should be a little more direct, but in a different way: since Jim Thorpe clearly benefits from the tourist attractions too, they should help pay for it (or subsidize some of the 'amenities' in ways that help pay for it) as well.

One way this might be arranged is to impose the typical kind of 'arena tax' that we see sneaked in when a city wants an NBA team but doesn't want the schmoozed sweetheart deal to hit local coffers hard.  What they do is surcharge businesses that largely cater to nonlocals or businesses: hotels and motels, rental-car agencies, the sort of services where relatively small 'fees and charges' disappear into cryptic line-items seen only when reading the fine print to see why one's bill is alarmingly different from the amount quoted at check-in.  Funds like this can be imposed on a larger geographic area ... and can be earmarked for relatively specific purposes.  Defining it so as to put the local 'contribution' on businesses that specifically benefit from the Lehigh Gorge and Northern operation would be an ideal way to gauge the contribution that the operation actually makes to the local economy ... but not affect the actual tax paid by the average voter (who could probably care less there's a train until it blocks their grade crossing).  If we were to make sure this revenue roughly equaled or indeed offset the amount of any amusement tax charged, everybody in essence wins: each tourist pays a small percentage, not readily missed; the RBMN has its effective 'contribution' to play in Jim Thorpe subsidized but in turn subsidizes its impacts on the town, and the town gets any 'excess' support costs paid for without having to raise taxes or cut services to do so.

And yes, I think the town should waive some or all of the 'retroactive' assessed tax in return for setting up collections henceforth -- perhaps explicitly tied to passage and receipts from the attraction tax -- to get everyone where they ought to be... but that's a matter for negotiation.

Expect this to go right up to the wire otherwise, in a game of brinksmanship.  And yes, that's what I expect.  Probably past the 'deadline' and perhaps involving a period where RBMN doesn't operate service, or outsources this service to a third party (which is, as noted, what they "should" have done, even if it were a shell corporation, in the first place).

 

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Posted by zugmann on Saturday, October 19, 2019 11:30 PM

BaltACD
State Grant money that benefits Jim Thrope by having the RBMN continuing to serve the town - be it for 'sightseeing trains' or handling freight for the town's businesses.

Yeah, but we;re talking millions (with a m) in grant money vs the thousands an amusement tax (added to ticket costs) would bring. 

 

All I'm saying, is if you're going to have a fit about paying taxes, don't be first in line when the gov't is giving handouts, either.

  

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Posted by zugmann on Saturday, October 19, 2019 11:36 PM

Flintlock76
Grant money? Suffice to say there's the old saying, "For free, you take. For pay, shop around." Anyway those grants were awarded because the state believed the Reading and Northern would be good for the economy of the areas it covers and so it proved, it was money well spent. At any rate I'd say Jim Thorpe needs the railroad a lot more than the railroad needs Jim Thorpe.

Or the money came because of a well-connected legislator.  This is PA, of course. Any more thoughts on that, and I risk turning this political.

But would the RR have as much success turning back in the middle of a field?  All the trips have been heavily reliant on Jim Thorpe as a destination or origin.   Like I said here (or was it there?) it's a symbiotic relationship.  This move will just hurt them both.

  

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Posted by zugmann on Saturday, October 19, 2019 11:57 PM

daveklepper
And lots of railroads have run excursion trains. There is no historical precedent for an amusement tax on a common-carrier railroad. The New Haven even ran a yearly Themes River Regatta observation train.

https://www.baltimoresun.com/news/bs-xpm-1995-04-20-1995110156-story.html

  

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Posted by D.Carleton on Sunday, October 20, 2019 1:30 AM

I do find it interesting that this all happens as the soon-to-be finished bridge at Nesquehoning will effectively bypass Jim Thorpe through freights. 

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Posted by daveklepper on Sunday, October 20, 2019 9:25 AM

Paying the amusement tax would set a dangerous precedent, making fantrips even less easy to arrange and fund than at present.

A trainride that goes around and around in circles can be called an amusement.  (Or, in itself. education?)  But a train to a scenic wonder is clearly providing transportation, not amusement  And the scenic wonder is probably better defineed as education, not amusement.

Blue Mountain and Northen already pays real-estate taxes on owned property.

And I did consult my lawyer already, who has New York State. Florida, and Israeli licenses.   A friend, of course, no charge to me.

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Posted by zugmann on Sunday, October 20, 2019 9:44 AM

daveklepper
A trainride that goes around and around in circles can be called an amusement. (Or, in itself. education?) But a train to a scenic wonder is clearly providing transportation, not amusement And the scenic wonder is probably better defineed as education, not amusement.

I think you are really stretching the definition of transportation.  I guess a roller coaster can be transportation?   I guess all that's left is for the courts to decide.

  

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Posted by Flintlock76 on Sunday, October 20, 2019 10:23 AM

zugmann

 

 
daveklepper
And lots of railroads have run excursion trains. There is no historical precedent for an amusement tax on a common-carrier railroad. The New Haven even ran a yearly Themes River Regatta observation train.

 

https://www.baltimoresun.com/news/bs-xpm-1995-04-20-1995110156-story.html

 

Guess what happened to the EnterTrainment Line?

https://en.wikipedia.org/wiki/Maryland_Midland_Railway  

The "powers-that-be" up in Jim Thorpe might benefit from this little story...

https://fablesofaesop.com/the-goose-with-the-golden-eggs.html  

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Posted by daveklepper on Monday, October 21, 2019 12:23 PM

Posted also on the General Forum thread on this topic, but important enough to be repeated here:

Andy Mueller might to well to request a meeting with the Mayor and give him this message:

"I'm a visitor to your town.  I wish to see Lehigh George.  I hire a regular taxi takes me there and waits while I take photos, and then brings me back to Jim Thorp.  Are you going to have that taxi driver pay an amusement tax?

How does that taxi-driver's service to me differ from what the railroad does?

Not only that, but the taxi driver asks me what music I like.  When I say Jazz, he says, 'Fine, I've got a Count Bassi CD,' and I enjoy the music as well as the scenery and trip.

If you don't charge the taxi driver with an amusement tax and charge the railroad, isn't that rank discrimination against the railroad industry?"

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Posted by Overmod on Monday, October 21, 2019 4:17 PM

daveklepper
"I'm a visitor to your town.  I wish to see Lehigh George.  I hire a regular taxi takes me there and waits while I take photos, and then brings me back to Jim Thorp.  Are you going to have that taxi driver pay an amusement tax?

No, but if he isn't paying a concession tax to operate in the city, someone is asleep at the switch.

The much better example isn't licensed or medallioned anything: it's Uber.  And yes, if you hire a car ... or a bus ... to carry you around a scenic tour of the area, it's entertainment: just far less 'enforceable' than when you board at a central location and have an admission charge for the attraction.

An analogous argument prevailed for many years about online e-commerce charging local sales tax.  Only recently -- but to me it's a landmark change -- did technical means coupled with clever legal wrangling make it practical to demand tax be collected on any transaction, and paid to some representative entity, and a precedent established to enable it ... and you saw state after state, like a stick of firecrackers, jumping on making new laws to exploit it.  (Much as the laws for separate-but-equal multiplied after Plessey v. Ferguson...)

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Posted by daveklepper on Monday, October 21, 2019 10:35 PM

The taxi pays the concession tax because the real-estate he uses is the public's street and road system and the inspection process must require funding to assure safe and healthy and clean operation of the taxis.  Just as the railroad pays real-estate taxes on the property it owns.

In any case, the railroad does have the upper hand.  They do not make money on the service, they provided it as a public service, and they have every right to sotp providing it.

The amusement tax is an additional tax, added to the other taxes a movie theatre or pool hall already pays.

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Posted by alphas on Thursday, October 24, 2019 11:31 PM

I was always surprised the Federal Government didn't consider a Federal tax on interstate on-line sales.    As far as I can determine, it wouldn't be unconstitutional.    I suspect that a 3% or 4 % Fed sales tax would not have generated that much oposition other than from the interstate on-line merchants.   As far as I know no Federal politician or any political party ever proposed it as a means of reducing Federal deficits.     Note: This thought occurred to me before the states began trying to tax online sales to their residents so its not a new one.  

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Posted by Enzoamps on Friday, October 25, 2019 1:28 AM

Here in Michigan, 25 years ago, they raised sales tax from 4% to 6%.  You would have thought a war had started.  What congressman would dare suggest creating a national sales tax and expect re-election?

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Posted by Overmod on Friday, October 25, 2019 5:21 AM

daveklepper
They do not make money on the service, they provided it as a public service, and they have every right to stop providing it.

With the further point, as Andy pointed out, that (in the railroad's view) the various passenger operations have almost certainly brought more than a million dollars' revenue to Jim Thorpe over the years, apparently with no support or special consideration from the municipality at all for the 'privilege', and the 'reward' is not only a high-dollar tax grab, but badmouthing of the railroad and some of its people.

As a friend of mine noted: "No good deed goes unpunished."  

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Posted by daveklepper on Sunday, October 27, 2019 8:11 AM

Continued dicussion on the General Forum

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Posted by Overmod on Sunday, October 27, 2019 8:12 PM

I brought up two issues on RyPN this afternoon: the statute clearly indicates that the 'amusement' has to be rendered within Jim Thorpe (which most of the actual trip certainly isn't) and that providing 'free' shuttle-bus service to a pickup point just north of Jim Thorpe gets them out of any need to impose the tax, whether the train lays over in Jim Thorpe until immediately prior to departure.

I also noted that the town's imposing back taxes on what is in essence a grossly inflated amount might be actionable, as could be any claims, veiled threats, interference with business, etc. involved in demanding payment for that excess.  

It does seem to open the door for other municipalities (small, if any; none I could find had a code posted on ecode360) north to Old Penn Haven to charge their own version of 'amusement tax' for any part of a trip spent within their borders.  Again as provided by Pennsylvania law, this would be collected by Jim Thorpe together with 'their' amount but would then be computed, disbursed and forwarded (reasonably promptly) to each individual municipality involved.  Would the time, effort, and paperwork be worth the amount involved? who knows -- but Jim Thorpe opened the can; hope they like a prospective steady diet of angleworms on toast...

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