By Greg Avery
Camera Staff Writer

A lawsuit that bounced around state courts for the past five years gave Boulder movie theater companies no reprieve from a city admissions tax.

The Colorado Court of Appeals has upheld previous rulings that the 5 percent city tax, applied to movie tickets and other admission fees, is legal.

Three movie theater companies, which five years ago owned all commercial movie houses in Boulder, sued the city in 1997, trying to get the admissions tax declared unconstitutional and get back money they had paid to the city between 1993 and 1997.

Since 1971, Boulder has charged a tax on admission fees charged by businesses.

People pay an average of $150,000 each week in admission fees at Boulder businesses, netting the city government $7,400.

That translates into about $380,000 a year in city government revenue.

Most of the tax revenue was paid by movie-goers before 1997. That year, facing stiffer competition from new theaters sprouting up along U.S. 36, theater companies cried foul, demanded a refund of tax money and filed a lawsuit.

The companies in the suit were CinAmerica Theatres, which owned the Arapahoe Village 4 and Mann Crossroads 6; Cinema Saver Theatres, which owned Basemar Cinema; and United Artists Theatre Circuit, which owned the Village 4 and the now-defunct Flatirons Theatre.

The tax was unfair, they said, and hurt movie theaters' ability to compete.

Had the city lost the lawsuit, it would have had to pay at least $1.7 million back to the movie theater companies.

"It was a hefty chuck of change," said Tom Hagerty, city deputy finance director.

Legally, the movie theater companies argued, the city tax constituted a tax on a select group of people — mainly those frequenting about 10 businesses in the city.

The tax also raised the potential for the city to increase the admissions tax if it disagreed with the content of movies being shown, the companies' attorneys argued.

The appeals court, like lower courts, disagreed. Its May 9 ruling said no evidence was found that the city's tax threatened or was intended to threaten the expression of "particular ideas or viewpoints."

The judges decided that the city's tax was broadly applicable — it also covers dinner theater, strip clubs, plays, concerts, dances and other events where an admission fee is collected — and did not target only movie theaters or their customers.

Since the companies filed the suit, the ownership of most Boulder movie theaters has changed. Today, Boulder live music venues account for the largest percentage of admissions tax payments.

Lawyers representing the theater companies could not be reached for comment.

Contact Greg Avery at (303) 473-1307 or averyg@thedailycamera.com.

May 28, 2002

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