TodaySU lawyer says no way to township amusement tax
Township contends the tax is valid and vows to collect the 10 percent levy.
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Article RatingA lawyer for Shippensburg University says the university will go to court rather than cooperate in the collection of an amusement tax adopted in Shippensburg Township.
Township officials say they’ll try to collect the levy, one way or another.
Supervisors passed the 10 percent tax on entertainment events in the township in August. The measure became effective Sept. 1.
Jeffrey Hawkins — attorney for Pennsylvania’s State System of Higher Education — cites legal precedent that he says protects state entities from local taxes.
In an Aug. 26 letter he wrote “the university will be forced to challenge any attempt by Shippensburg Township to assess the amusement tax ... or to impose any obligation on the university to collect the tax from patrons.”
Township solicitor Jim Robinson told supervisors Saturday that the university’s response “was exactly what we expected.”
Robinson says the PSSHE attorney is correct in some respects — the township cannot directly charge the university with the 10 percent levy and does not have the authority to force the university to collect the tax.
However, Robinson says he has “strong legal precedent” that the tax is valid.
“We are not taxing the university, we are taxing the ticket buyer,” Robinson said Saturday.
“If the university wanted to be nice guys and collect the tax, there is no reason they can’t do that,” Robinson said.
If university administrators opt to refuse to cooperate, however, Robinson says the township has other options. He admits those options are “much more labor intensive.”
Robinson did not elaborate on the alternatives, but Township Secretary Linda Asper said the remedy would require a system that directly bills ticket buyers at the university’s Luhrs Performing Arts Center and other entertainment venues on campus.
Supervisors say they passed the amusement tax levy with an eye to recouping expenses for snow removal and maintenance costs linked to SU’s heavy use of township roads and streets — in the absence of real estate revenue on millions of dollars worth of tax-exempt property held by the university and the Shippensburg University Foundation.
Township figures indicate the property tax revenue loss is at least $95,000 annually.
The amusement tax levy exempts sporting events, movie theaters and bowling alleys and any events that feature primary or secondary school students.
When the ordinance was adopted, Supervisor Steve Oldt said other events could be taxed at local taverns and at the township’s public park, where a band shell could host future events.
A local tavern where live music acts perform has already applied for a permanent permit that positions the tavern to pay the tax without registering for a separate permit for each event.
Township supervisors have tried unsuccessfully to acquire “payment in lieu of taxes” from SU for years. Supervisors say road maintenance and snow removal on roads that serve the university are a drain on the township budget.
Proposed legislation in the state General Assembly would provide a mechanism for payment to municipalities that provide infrastructure for state system schools, but Oldt said passage of the measure appears unlikely.
