Regina’s entertainment tax discussed by executive committee Pipa News

Regina’s entertainment tax discussed by executive committee

On Wednesday, the executive committee voted to amend a nearly 100-year-old ordinance taxing recreational tickets sold in the city.

THE HISTORY

Since 1923, the city of Regina has imposed an ‘entertainment tax’. The ten percent tax rate was on recreational event tickets sold to customers, allowed by The city ​​law.

The bylaws have gone through multiple changes since inception, removing certain companies or events.

The tax used to be levied on every event at the Regina Exhibition Grounds (now called the REAL neighborhood) and the Agridome (now the Brandt Center). The charges for those events were removed from the statutes in 1989.

In 1990, the city abolished the tax on events in city facilities. At the time, the city was of the opinion that the income would be better collected through rents.

In 1999, the tax was removed from ticket sales for the Saskatchewan Roughriders and Regina Rams to help the organizations. For events at Mosaic Stadium, there is a 12 percent fee that the city collects for major events.

However, since 2003, the city’s movie theaters have been the only ones to pay the extra ten percent.

“The tax has a complicated history,” said Michael Paris, Cineplex Entertainment VP of Legal and Government Relations. “It’s very problematic for our industry.”

On Wednesday, the executive committee voted to lower it to five percent.

MOVIE THEATERS AND THE TAX

Four movie theaters in the city currently pay the tax: Galaxy Cinema Normanview, Southland Mall Cineplex, Landmark Cinemas Aurora and Rainbow Cinemas.

Only two jurisdictions in Canada have such a tax. Including other sales taxes, the total tax was 15 percent, one of the highest in Canada.

In the provincial budget for 2022-2023, from October 1, 2022, the provincial government has introduced an additional tax of six percent on recreational activities such as concerts, sporting events or cinema tickets.

That PST would have increased the total tax on movie tickets in Regina to more than 20 percent, making it the highest rate at six percent.

Paris called the entertainment tax an “economic impediment”.

“It’s particularly blatant in our view because it’s in movie theaters and only movie theaters,” he said.

Paris said Cineplex and other theaters, such as Landmark, had included all applicable taxes — such as the entertainment tax — in their rates. In the spring, however, their policy changed to have a pre-tax face value, which the patron can see reflected in the cost.

“It’s a surcharge that the consumer feels,” he said.

Rainbow Cinemas will close its doors on September 25. count. Lori Bresciani believes the city tax has contributed.

“There’s only so much you can do,” she said. “We know about labor, inflation and all the things that affect companies’ ability to stay open. It affects everything.”


THE CITY AND THE TAX

The rate reduction brings the city more in line with other jurisdictions across the country, but still the highest.

For pre-pandemic levels, the city said the tax generated more than $700,000 in revenue annually, falling to just $169,000 in 2020 and rising slightly to $219,000 in 2021.

“The entertainment tax is one of the few tax levers – outside of the mill rate – that we have as a city,” said Mayor Sandra Masters.

Bresciani called the tax discriminatory because it targets only one industry in the city.

“If we want to call it an entertainment tax, it should apply to all the entertainment we have in the city,” she said. “It shouldn’t just be on one industry.”

Under the statutes, one-tenth of the total tax is withheld by the movie theater operators to help cover the cost of collecting the tax on behalf of the city. Paris said the cost of collecting the fee at the gate is less than the amount it maintained one-tenth.

count. Bob Hawkins wasn’t convinced that abolishing or even lowering the tax would mean a cheaper night out for families.

“I’m not convinced that people are staying away from the theater because of this tax,” he said. “I’m also not convinced that if the tax were abolished, the cost of movie tickets would go down.”

The city council said it had discussed the tax increase last year.

“Since we’re out [the pandemic], we have decided not to make a recommendation,” said Barry Lacey, executive director of financial strategy and sustainability for the city. “I think the discussion can still be had in the future – as it is another tax source for us – to expand it.”

The motion was passed with six votes in favor and three against. count. Bresciani did try to amend the statutes to remove it completely, but it was not allowed as the motion to lower it was still pending.

Paris called the cut in interest rates a semi-victory.

“Right now you’re transacting it in your local cinemas. That’s a shame,” he said. “But the net result is that it’s not as bad as it could have been.”

The executive committee’s decision will go to council on September 28.

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