No admissions tax decision as questions continue

The Monroe City Council continued to grapple with the city's Admissions Tax on Tuesday, Aug. 9, discussing ongoing efforts to amend the current tax code to exempt certain small businesses.

The matter initially came up in June, after business owners Kristina and Paul Barker learned they would be required to pay a 5 percent admissions tax on all revenues earned during "open playGÇ¥ sessions at their business, Jump, Rattle & Roll. Located in Monroe's industrial area, Jump, Rattle & Roll provides families with 8,500 square feet of interactive play space. The indoor family-fun center features jumbo-sized bouncy houses and other inflatables, slides, dollhouses, air hockey, foosball and more.

Open since 2011, the Barkers were dismayed to learn about the tax. Had they known, they might not have chosen to open their business in Monroe, they said.-á

According to the city, the admissions tax is meant to be a pass-through tax, which the patron pays on top of the regular admission charged by the establishment. According to recent city documentation, Galaxy Theater is the only business in Monroe currently paying admissions tax, but an internal audit process has been initiated to discover if there are any other eligible businesses.

The tax also applies to one-time and annual events, such as the different wakeboarding events at Lake Tye that charge admission. Elementary and secondary schools and nonprofit organizations are exempt.

On July 12, a motion was passed by the city council that directed Mayor Geoffrey Thomas and staff to prepare an ordinance that would revise the admissions tax code and accomplish a general cleanup of the language. City attorney Zach Lell was tasked with shaping the amendments.

Increasing code specificity by removing the section that applied the tax to the use of "equipment or facilities for purposes of entertainment or amusement,GÇ¥ effectively solved the issue for small businesses like Jump, Rattle & Roll, and there were several other amendments proposed in the revision process.

Councilmember Kurt Scarboro said he was worried about equity. If one family visits Galaxy Theater while another opts for bouncing around at Jump, Rattle & Roll, he asked if it was fair that one family would have to pay the tax while the other would not.

Councilmember Jeff Rasmussen voiced concerns about losing out on revenue by adapting the code so more businesses would be exempt. He questioned whether the city was shooting itself in the foot, and wanted to see hard numbers showing revenue that could potentially be lost.

"That was one of the questions that was asked and I'm not seeing that information,GÇ¥ Rasmussen said.-á

City Administrator Gene Brazel confirmed that the revisions could impact the traveling tournaments of concern to Rasmussen.

"Right now, those big tournaments, they do pay admissions tax,GÇ¥ Brazel said. "Certainly, by making this change some things could fall through the cracks.GÇ¥

Rasmussen said he was not willing to vote in favor of the first reading without additional analysis to make sure the city wouldn't lose any revenue. Monroe Municipal Code stipulates that ordinances be read and voted on twice before they are passed into law. -á -á

Councilmember Kevin Hanford made a motion to accept the first reading, which was seconded by Councilmember Jim Kamp. The motion passed 4-1, with Rasmussen dissenting. Councilmembers Patsy Cudaback and Jason Gamble were absent.

Further discussion on Admissions Tax was tentatively scheduled for Aug. 23. Click here to-áreview the code amendments.