Ephrata adds admission tax

Moviegoers to pay 0.5 percent tax

EPHRATA — The Ephrata City Council approved an admission tax of 0.5 percent Monday, attempting to shield establishments such as Lee Theater from a 5 percent tax Grant County would otherwise be required to levy.

The theater is currently the only business subject to the new tax, which is collected on admission revenue of up to $1 million. The tax jumps from 0.5 percent to 2 percent for gross revenues exceeding $1 million.

In November, the council eliminated a 4 percent admission tax established in 1989, claiming it was unnecessary and unused. At the time, City Administrator Wes Crago said the tax generated no more than $1,000 per year and proved nearly impossible to enforce. It created accounting difficulties and was never budgeted, he said.

As the city dropped its 4 percent admission tax, Grant County Treasurer Darryl Pheasant stepped in and began enforcing a tax of 5 percent. The treasurer must collect the county's tax on admission revenue, unless a city or town levies a "similar" tax within its corporate limits, Pheasant said in an interview Thursday.

"That's the question here," the treasurer said. "A half percent versus 5 percent, is that considered a similar tax?"

A 4 percent tax was definitely considered similar, he said.

"A half percent looks like they're just trying to find whatever they think is the bare minimum, to collect nothing," Pheasant said.

It remains unclear whether the city's 0.5 percent tax is enough to keep the county from enforcing its higher tax, according to the treasurer. He needs to meet with the county's civil deputy prosecutor about the issue.

Pheasant questions why Ephrata found it difficult collecting the admission tax, saying the city of Moses Lake has no problem collecting from Fairchild Cinemas. The two theaters share management, he pointed out. Collecting the admission tax would generate a "significant" amount of money for Ephrata, he said, suggesting it might be enough to cover the city's annual contribution to the Grant County Health District.

The county plans to collect a 5 percent admission tax from the Ephrata theater for the interim time period starting in late November, following the city's repeal, until the 0.5 percent kicks in. The county plans to take action, if necessary, to get paid for December and January, he said.

Crago said Pheasant "is not being the big bad wolf," just dutifully trying to enforce a tax established by the county and allowed by the state since the 1980s.

The November elimination of the 4 percent tax was part of Ephrata Mayor Chris Jacobson's continuing effort to streamline city government, ordering staff to find any unused, unneeded or unenforced municipal code.

In other business at Wednesday's council meeting:

? The city entered into an interlocal agreement with the Grant County Economic Development Council for 2007. The city council agreed to pay the EDC $3,465, or 50 cents per Ephrata resident, for the year.

? The council authorized city staff to enter an agreement with an environmental consultant, RETEC, for work at the Ephrata Landfill in 2007. The city committed $68,700, for a one-year term with the consultant.