Hickory acts to increase amusement tax revenue

Feb. 16--The Hickory Township supervisors are revamping the municipality's amusement tax ordinance.

The supervisors are planning to repeal the existing amusement tax ordinance and enact a new one at their 7 p.m. March 4 meeting at the municipal building.

According to Supervisor Kathy Abranovich, the change is partly in response to the Lawrence County Fair's having affirmed its nonprofit status in 2016. The township can no longer impose the tax on the fair's ticket sales.

Additionally, the supervisors learned that under the township's existing ordinance, it cannot tax other admissions on commercial events at the fairgrounds, such as concerts, rodeos, lantern festivals or other events, for tickets that are purchased online or in advance or off-grounds. It could only tax the sales at the gates, Abranovich said.

She pointed out that the language in new ordinance will remedy that and will allow the township to tax all paid admissions, excluding the county fair and events by other nonprofit organizations such as the school and student-related functions.

The existing 25-year-old ordinance, enacted in 1993, imposes a 7 percent tax on all amusement profits, and the proposed ordinance will keep that charge at 7 percent.

"But we were having a hard time enforcing that charge, because there are loopholes in the existing ordinance that exclude us from collecting the tax on online ticket orders," Abranovich said. She cited events such as races, Coachman's Night Out, a Festival of Lights, "anything they collect an admission price for," as taxable under the ordinance.

THE NEW RULES

Under the proposed ordinance, the tax will be levied for each amusement within the township for which the individual price of admission is $1 or more. If there is no fixed admission price or fee, the tax will be based upon the gross admission fee, gross participation fee or gross money collected. If the admission is partly included in the price of parking, refreshment, service and/or merchandise, where those are required as conditions for admission or participation, the taxable price will be based on 100 percent of the price paid for parking, and other services, the measure reads.

Copies of the proposed ordinance are available for public review at the Hickory Township Municipal Building at 2735 Eastbrook Road, between 8 a.m. and noon weekdays, or at the business office of the New Castle News, 27 N. Mercer St. between 8 a.m. and 5 p.m. weekdays.

When the fair became exempt from the tax with its nonprofit status in 2016, the township's proceeds from the tax plummeted from $7,000 a year to $7, Abranovich said, adding that is one reason why the changes in the ordinance are necessary.

She said that the money generated by the tax goes into the township's general fund for general operating expenses.

"Our budget is only around $400,000 a year, so $7,000 was a significant amount," she said.

A light festival held at the fairgrounds last year sold hundreds of tickets online, but the sponsors did not have to pay the whole tax because the tickets were all pre-sale and online sales, Abranovich explained.

She pointed out that groups sponsoring events in the township must obtain permits from the township tax collector.

"That's how we know to collect the tax," Abranovich said, adding that process also is described in the proposed measure.

FAIR PROPERTY TAXES

She added that the township could have pursued collecting the tax from the fair, but in light of the fair being required to pay its real estate taxes, insurance, utilities and winner premiums, "we do feel they are essentially nonprofit. We didn't want to make it any harder for them," she said.

The Lawrence County fairgrounds is the single biggest entity, besides the school, that also provides home to some commercial events throughout the year that the township deems taxable under the amusement ordinance.

The Lawrence County Fair, technically known as the Lawrence County Farm Show Inc., in 2016 filed articles of amendment to its charter, updating its constitution and bylaws showing its 501(c)(3) status. The organization at that time had filed a tax assessment appeal to the Lawrence County Assessment Board of Appeals, seeking exemption of its property taxes, contending that it is purely a public charity.

The assessment board denied the appeal on Oct. 22, 2016, and the farm show then appealed the matter to the Lawrence County Court of Common Pleas. Following a hearing on Sept. 5, 2017, Judge John W. Hodge handed down an order on Feb. 14, 2018, agreeing with the county assessment board conclusion and denying the farm show exemption from paying taxes.

About 75 acres of the four-parcel tract of the fairgrounds lie in Hickory Township, and 24 acres are in Scott Township.

The farm show's school taxes for last year were $14,195 for Hickory Township only. Its township tax for this year is $1,201.68 plus a $375.53 fire tax, and the county will tax the fair $7,319.23 this year. That makes the total in property taxes for the Hickory Township portion about $23,092, according to figures provided by county chief assessor J.R. Hardester.

The fair's property taxes on the Scott Township part of the property this year will total an additional $1,440, Hardester said.

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