Wednesday, August 13, 2003

By Carole Gilbert Brown , Tri-State Sports & News Service

"Easy come, easy go" may be simple to say, but not always so simple to do.

Collier commissioners learned that last week when, after months of negotiations, they quietly but unanimously approved a $315,000 admissions tax repayment to Destinta Theatres at Chartiers Valley Shopping Center.

According to the settlement agreement, the tax was collected without proper legal authority.

The repayment, paid in a lump sum by last week, represents some but not all of the admissions taxes Destinta collected and paid to Collier from September 1999 through December 2002. Destinta paid a total of $472,887.96 during the period, but a three-year statute of limitations and a desire on both sides to resolve the matter out of court led to the $315,000 settlement.

According to a 1965 state statute, townships cannot collect taxes on admissions to motion picture theaters; that right is reserved for first- and second-class cities.

"There is no question that a refund is due," Solicitor Charles Means said. "It's something you have a legal obligation to do. You collected something illegally, so you have to be prepared to give it back."

The repayment was not budgeted for this year, but Means said Collier has enough unappropriated funds to pay it.

Shortly after the theater complex opened Aug. 13, 1999, Larry Haber, Destinta co-owner and chief financial officer, wrote to the township, seeking some abatement on the 5 percent admissions tax. It is unclear what happened to that request, but no action was taken until January 2000, when several new commissioners joined the board.

Solicitor Michael Kaleugher wrote a reply to Destinta stating that the board could not legally impose an abatement.

Kaleugher defended himself by saying, "I didn't write [the 1982 Collier admissions tax ordinance] and I wasn't there when it was collected. I was never asked to look at whether they legally owed the tax."

Mamula, who considered the tax largely dormant, said, "No one ever said anything to the board that it was illegal."

Means attributed the improper collection to confusion between the 1965 state tax enabling ordinance and the township's ordinance as well as confusion between the words admissions and amusements.

Still, the repayment issue raises questions, such as how an illegal tax was collected in the first place, and how and when the error was discovered.

Someone in the audience asked who collected the tax. Board President Sandra Lamb replied that Treasurer Judith Astfalk had but quickly added, "nobody's at fault here."

Later Lamb said, "We're putting no blame on anyone."

The admissions tax was never collected by Central Tax Bureau of Pennsylvania, Collier's Act 511 tax collector. Robert Villella, Centax executive vice-president, said the contract between Collier and his firm is for the current and delinquent collection of earned income, occupation and business privilege/mercantile taxes only.

Astfalk said she was ordered by the board in 1999 to collect the tax in her position as township treasurer, a capacity in which she collects other taxes, too, such as those on mechanical devices.

She said that position pays a flat salary and that she never received commissions from the collections of admissions taxes or any other Act 511 taxes.

"My job as the treasurer is to follow the ordinances set by the commissioners. I'm not a decision-maker."

Michael Foreman, local government policy specialist for the Center for Local Government Services, said it is not uncommon for communities to divvy up collection duties of the Act 511 taxes, also known as nuisance taxes.

Destinta, which opened its 20-screen theater with stadium seating Aug. 13, 1999, after spending $12 million to renovate the 100,000-square-foot former Warehouse Club, did not add an admissions fee to its ticket prices. Ticket prices are the same for its 22-screen theater in North Versailles. Destinta also owns multiplex theaters in Clarion, as well as in New Jersey, New York and Connecticut.

Besides the repayment, the settlement protects the township and its officials and employees from any further claims from Destinta or third parties.

Both Lamb and Haber indicated relief that the situation was resolved amicably.

"It's a big load off my mind," Lamb said.

Haber was reluctant to comment, noting Destinta had agreed to let Collier handle the matter.

"We just want to show movies," he said.

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