Taxing Tickets is Strangling Show Business
How many cool night clubs didn’t open? How many big trade shows chose a city other than Richmond? How many touring rock ‘n’ roll acts skipped Richmond? How many companies didn’t move here? How many jobs never materialized?
While no one can answer those thorny questions with any certainty, they need to be asked. That’s because part of what stopped those things from happening remains an obstacle. It is still acting to stifle the entertainment industry in Richmond.
"It" is the seven percent tax The City of Richmond extracts from every dollar for an admission ticket that changes hands within its boundaries. Richmond’s "admissions tax" comes off the top of the gross, before any other splits or payments are made.
Now, in this time of upheaval and change, some progressive thinkers in Richmond are zeroing in on how to allay the admissions tax The City collects from the Byrd Theatre, the Siegel Center, Poe’s Pub, and every business in town that sells tickets or collects a cover charge at the door.
By the way, Chesterfield County and Henrico County don’t have such a tax. Which means movie distributors know it’s usually better for them to ship a print of their feature film to a cinema house in the suburbs.
Here’s why: The movie theaters and distributors generally agree to split the revenue that comes in at the box office. The percentage each might take can vary greatly, depending on the situation. To keep this simple, let’s say the distributor of "Jaws VII," a new summer semi-blockbuster in its first run, agrees to a 50/50 deal with two theaters.
The Suburban Theater in Henrico County and the Urban Theater in Richmond will open the picture on the same Friday; both theaters will pay the title’s distributor 50 percent of the box office take.
Unfortunately, "Jaws VII" flops; it plays just one week. Both exhibitors take in the same amount of money -- a paltry $2,000 each. So, according to terms, the distributor will get a check for $1000 from the Suburban Theater and a check for $930 from the Urban Theater, which had to send The City $140.
Of course, the beleaguered Urban will also be subject to all the ordinary taxes and fees businesses pay.
Which means movie theaters within the city limits are operating at a disadvantage. Traditionally, they have had a harder time getting product from distributors. What many people don’t grasp is that the admissions tax is more of a problem for the people in show business than it is for the consumer.
That’s part of why there was a 37-year gap between the opening of MovieLand in February and the last new cinema to open in Richmond -- the Biograph Theatre in 1972.
The same problem plays out with live shows, too. If you have 30 days to put Iggy Pop into 20 venues, you will consider several factors in choosing the best situations. In this region, one will stand out: If you rent a Charlottesville music hall NO admissions tax will come out of the gross.
In Richmond that seven percent difference squeezes the risk/reward ratio too much for lots of touring acts. Thus, plenty of them skip Richmond. And, local music lovers have gotten used to traveling.
The admissions tax in Richmond is not unique. Unlike, Charlottesville, most cities in Virginia have such a tax; the rate varies. Which only means backward thinking exists in lots of places.
By the way, there’s no admissions tax in Austin or Nashville. In those two cities, known for their great live music scenes, the thinking appears to be more enlightened than what has prevailed here.
Richmond took in $2,447,670 in admissions taxes in 2008. No doubt, any spokesperson for The City will say Richmond needed that money.
Down in Austin and Nashville they pass on taxing tickets, because there are so many music-loving tourists and conventioneers coming to those cities, spending in all sorts of other ways that get taxed.
All of which makes the quality of life more attractive to companies looking to relocate. It might even keep some of the smartest kids from moving away, too.
Meanwhile, in Richmond, our government officials are wishing they could charge a seven percent admissions tax on a show that didn’t come here. They’re dreaming of taxing theaters and clubs that don’t exist ... while we all listen harder for the dogs that didn’t bark.
The good news is there’s an ad hoc coalition forming that will seek to do away with Richmond's show business strangling admissions tax. Talks have been informal, so far, but something is brewing. Next month there will be news breaking on this front. Remember, you read about it first at Richmond.com.
Stay tuned ...
F.T. Rea is a freelance artist and writer based in the Fan District. He publishes SLANTblog and the Fan District Hub, an independent community news Web site. Rea's work has been seen under a variety of local mastheads since 1972.
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