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Will Movie Ticket Tax Play There? : Monterey Park: Such a tax would be the first in Los Angeles County. But similar levies have been ruled unconstitutional in other cities.

January 31, 1991|IRENE CHANG | TIMES STAFF WRITER

MONTEREY PARK — As if movies weren't expensive enough, the City Council is considering imposing a 6.5% movie ticket tax, which would apparently be the first such levy in Los Angeles County.

Officials estimate that an ad missions tax on movies would add 39 cents to the price of a $6 ticket and net the city $50,000 a year. Monterey Park has only one theater complex--the three-screen Edwards Monterey Mall Cinemas on South Atlantic Boulevard.

But movie industry officials warn that a tax on their business might land the city in legal trouble. Similar laws in two other California cities have been struck down in court, and a lawsuit is pending against Fresno, which also has a movie tax.

Monterey Park is "proposing a tax that had already been declared discriminatory and unconstitutional," said Tim Warner, president of the National Assn. of Theater Owners of California. He disputed the city's contention that ticket prices would go up, however, saying theater owners in other cities had not passed on the cost to moviegoers.

Jim Edwards Sr., chairman and owner of Edwards Theaters Circuit Inc., which includes the Monterey Park theaters, said his office is sending the city copies of the court decisions in an effort to dissuade the council from imposing the tax.

"If they pass the tax, we will vigorously defend the issue in court," Edwards said Tuesday, adding that it was premature to discuss whether the company would raise movie prices in Monterey Park.

In 1989, the U.S. Supreme Court upheld state court rulings that admissions taxes in Pleasant Hill and Montclair violated free-speech rights and unfairly singled out certain facilities, especially movie theaters, that paid the bulk of the tax.

Large movie chains in those cities, including Edwards Theaters, are demanding that the tax money be refunded to them. They claim they lost money as a result of the taxes because stiff competition from theaters in nearby cities prevented them from raising ticket prices.

Nevertheless, Monterey Park officials said a movie admissions tax in their city probably would pass legal muster because it would be an extension of an existing tax on events such as concerts and performances, and thus would not single out movie theaters.

Monterey Park's proposed admissions tax "applies to all assemblies . . . concerts, all events unless they're nonprofit," said Councilman Sam Kiang, who is pushing for the tax. "I think if you couch it in those terms, it will withstand constitutional challenge."

City Atty. Anthony Canzoneri said he briefly reviewed the Montclair case and believes that Monterey Park's admissions tax would be legal.

Since movie theaters don't have to pay a sales tax on tickets, Kiang said, they should pay something to compensate the city for traffic and noise problems they create.

The city's admissions tax will probably be extended to movie theaters Feb. 11, when the council is scheduled to vote on the matter. In addition to Kiang, council members Fred Balderrama and Marie Purvis support the movie tax. Mayor Judy Chu and Councilwoman Betty Couch plan to vote against it, saying it would raise ticket prices.

The measure would be the first of its kind in Los Angeles County, said Warner of the theater owners association.

Kiang said he is proposing the movie tax as an alternative to the city's current $20 fine for illegal parking on street-sweeping days, which he has had to pay twice and considers excessive.

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