Louisiana Music Commission
New Orleans Amusement Tax Story Archives
This page contains all the stories the LMC has run on our NewsFlash pages. It also contains all press releases and related information that we've posted online.
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December 2, 2002
Free Event to Celebrate End of Amusement Tax on Live Music
There will be a free event at the Orpheum Theatre in New Orleans on Thursday, December 5 at 7pm to celebrate the pending end of the Amusement Tax and to honor the New Orleans City Council members who voted in favor of ending the tax. Former council members Scott Shea, Jim Singleton and Troy Carter, and current councilman Oliver Thomas will be honored. The event will feature refreshments, food and music. The public is invited.
HB 218 Filed by Rep. Landrieu: Final Nail in Amusement Tax Coffin
As he promised, Rep. Mitch Landrieu of New Orleans has filed HB 218 which repeals the enabling legislation that allows the City of New Orleans to collect the Amusement Tax. This is the coup de grace for the tax. We urge all musicians and music supporters to let their legislators know that HB 218 must pass. (NOTE: This bill did not make it to committee and was not introduced for a vote.)
May 6, 2002
Amusement Tax Collection Repealed by N.O. City Council
Collection of the City of New Orleans Amusement Tax on live music will end on December 31, 2002. In a 4-3 vote this past Thursday at what was the last meeting of the City Council during the Morial administration, an ordinance by outgoing member Scott Shea was amended to completely repeal collection of the tax effective January 1, 2003. Incoming mayor Ray Nagin contacted council member Oliver Thomas via phone to endorse the effort. Despite this call, 3 members opposed ending the tax. The action culminates a 10 y ear fight by the Louisiana Music Commission to end the onerous tax on live music. Rep. Mitch Landrieu is introducing a bill in Baton Rouge to kill the enabling legislation that allows the city to collect the tax, preventing the Amusement Tax from ever being revived. Our sincere thanks to all who have fought this tax over the years. Musicians and other supporters have fought this injustice for more than 20 years. Now, the City of New Orleans is poised to move forward to take its unparalleled music resources into a brighter future. This is good for all of Louisiana since New Orleans is often the launch pad for the musical careers of artists from around the state. With new mayor Ray Nagin being sworn in today, we look forward to continued progress in expanding the economic impact of music in Louisiana and improving the lives of the many people who work in this industry.
Amusement Tax on Council Agenda for Thursday, May 2
This is it! We can kill the hated City of New Orleans Amusement Tax once and for all. On Thursday, May 2 an ordinance to kill the tax will be on the agenda. We need to pack the chambers with musicians and music supporters. The council meeting starts at 10am and the tax will probably come up by 10:30am. We can kill the tax and then head over to Jazz Fest and not miss a tune! TELL EVERYONE TO BE AT CITY COUNCIL CHAMBERS THURSDAY, MAY 2 AT 10AM!
April 17, 2002
Amusement Tax: The Patient is Dying
The City of New Orleans Amusement Tax, a 60+ year old impediment to live music in the city that gave birth to more American music than any other, is in a terminal condition. Mayor-elect Ray Nagin campaigned on a platform that included killing the tax. And yesterday, the Budget Committee of the New Orleans City Council voted favorably to send an ordinance to the full council to exempt from the tax all live music venues of 1000 seats or under, effectively removing 90% of the tax base. According to one council member, they will probably amend the ordinance to completely kill the Amusement Tax. The LMC represented the music community at the budget hearing. Steve Picou fielded questions from Council members Troy Carter, Marlin Gusman and James Singleton. The author of the ordinance, committee member Scott Shea, pushed the bill through the committee, agreeing to a compromise that causes the bill to become enacted as of January 1, 2003. The full council is expected to vote on the matter at the regular meeting of May 2. We strongly encourage the New Orleans music industry to participate in this meeting with a show of strength in the council chambers that day. If the tax is killed at that meeting, a celebration and jazz funeral will be planned to once and for all, bury the hated Amusement Tax. The LMC has led this fight for 10 years. The tax was reduced from 5% to 2% thanks to a lawsuit filed by the Cat's Meow. Attorney Justin Zitler and Rep. Mitch Landrieu represented the plaintiffs. The case was settled and the tax was reduced and all exemptions were removed, causing the tax to be imposed on even more institutions such as museums and the UNO Lakefront Arena. The Superdome exemption was passed by the Louisiana Legislature many years ago. The Amusement Tax is cited as the number one problem facing live music in Orleans Parish.
Thursday November 12, 1999
City of N.O. Seeks Support of Arts Community for Property Fee Plan
The City of New Orleans is working to rally the arts and education communities in support of a proposal to pass a property fee in an upcoming election on Saturday, December 5. The fee, five cents per square foot for private property and nine cents per square foot for commercial property, has been criticized by the Bureau of Governmental Research, a nonprofit watchdog agency, as ill-planned and containing components that may be illegal. A $500,000 ad campaign, financed by the City of New Orleans and the Orleans Parish School Board is underway in support of the proposal. If passed by voters, the fee will be dedicated to helping pay police, city workers (long overdue for a raise) and teachers. In addition, the fee will raise enough money to eliminate the Amusement Tax. Unfortunately, the City has failed to clarify the component of the proposal that they claim will eliminate the Amusement Tax. LMC executive director Bernie Cyrus wrote to Mayor Morial on October 7 asking for a clarification of the proposal and an assurance that the proposal will formally and legally end the Amusement Tax but has received no reply. A meeting next week should clear the air on exactly how the Amusement Tax is to be dealt with by the proposal. We'll keep you updated.
N.O. Mayor Morial Proposes Property Fee to End Amusement Tax
Mayor Marc Morial has proposed a property fee to help New Orleans deal with several long-standing financial problems including the Amusement Tax. The fee, assessed at .05 cents per square foot of property for residential owners and .09 cents per square foot for businesses would raise approximately $50 million for the City. The funds would be used to help raise the pay of city workers and Orleans Parish teachers, expand the police force and a variety of other things, including ending the Amusement Tax. An announcement was staged yesterday at Gallier Hall. The proposition is expected to appear on the ballot for Orleans Parish voters in December. We'll have more on this later.
Chamber Sparks Closer Look at Music Industry and Amusement Tax
The New Orleans Chamber of Commerce is helping bring more attention to the business of music in the city. As a result of the Chamber's initiative to solve the problems associated with the onerous Amusement Tax, other entities, such as the Bureau of Governmental Research, Dr. Tim Ryan of the University of New Orleans, MetroVision and more are participating in a study of how the tax is collected and how much money is being generated by the tax and by the overall music industry. Preliminary work is being conducted by BGR to gather the info needed to better analyze the city's tax collections. BGR is conducting the study to assist in finding revenue sources to help defray the loss of the tax.
Signs of Progress on Amusement Tax
Recent meetings led by the Chamber of Commerce of New Orleans are leading to formulation of possible solutions to the Amusement Tax. Participants include representatives from the University of New Orleans, the Audubon Institute, the Louisiana Association of Alcoholic Beverage Licensees, the American Federation of Musicians, along with attorney Justin Zitler and representatives of several City Council members. Three meetings have been held, and a variety of issues have been discussed. These meetings mark a turning point not only for the Amusement Tax, but for the overall management of music resources in New Orleans. We expect several positive things to result from these meetings, including a long-needed master planning session for music. This effort to involve the Chamber is due to the enthusiasm of Charmaine Caccioppi, who joined the Chamber staff after leaving the employ of Sen. J. Bennett Johnston, where she was instrumental in the formulation of the Historical New Orleans Jazz Park component of the National Park Service. Many thanks to Charmaine for her understanding and diplomacy in bringing all parties together to begin this overdue process. We expect big results from these meetings and will keep our readers updated regularly.
Chamber to Host Amusement Tax Meeting Friday
The Metro New Orleans Chamber of Commerce has taken the lead in an effort to find a solution to the Amusement Tax. This Friday the Chamber is hosting a meeting of many of the critical players in the process, including City Council members, civic leaders and the heads of various organizations affected by the tax. The LMC will be represented by Chairman Ellis Marsalis and Bernie Cyrus. We are grateful to the Chamber for taking a stand in opposition to the tax and for initiating this meeting. Hopefully, a solution will be forthcoming and the tax will be ceased. As of June 1, the revised tax is imposed on many cultural resources in the city, including museums, the aquarium and zoo.
Monday May 25
State Supreme Court Issues Order on Amusement Tax
In an interesting wrinkle in the case of the Cat's Meow, et al. versus the City of New Orleans Amusement Tax, the Louisiana State Supreme Court has issued an Order that both sides in the case file supplemental briefs addressing why the City's enactment of the new Amusement Tax ordinance did not render the current appeal moot. This request likely thwarted a City strategy to ignore the Court's ruling (when it comes) on the case by stating that the new ordinance would not be covered by the ruling. Had this scenario transpired, a new suit would have been required to challenge the "new" ordinance, thus all the money spent by Cat's Meow and plaintiffs would've been for naught. Though this order by the court is good news for the plaintiffs overall, it is too little information to determine which way the Court might rule. However, we are pleased that the Court did not fall for the City's legal tactic and has brought the revised tax, which takes effect June 1, into the case.
Tuesday May 19
Amusement Tax Bill Deferred by House Committee
HB 108 by Rep. Steve Scalise, which seeks to repeal the Amusement Tax in New Orleans, was deferred by the House Ways & Means Committee. The action likely means the bill is dead for the session. Because the legislature only deals with tax issues every other year, it will be the year 2000 before such a measure can be considered again. In an interesting twist that few believe was unintended, the bill was on the agenda of Ways & Means on the same day that the City of New Orleans hosts "I Love New Orleans" day. As the committee was acting on the bill, dignitaries from the city were hosting a tent serving coffee and beignets from Cafe Du Monde just outside the building very near the meeting room. Ways & Means deferred most bills before it due to the fact that there is little time to debate and analyze the more than 180 bills the committee was slated to hear in the short legislative session. The administration has given education-related bills priority and has not backed many tax reform measures during this session. Several representatives of the city expressed their frustration with the Amusement Tax situation. However, a solution to the situation is not likely to be proffered during the legislative session, adding emphasis to the upcoming ruling by the State Supreme Court, which heard arguments Monday in the matter of the Cat's Meow et al versus the City of New Orleans Amusement Tax and Judge Robin Giarrusso's Civil District Court ruling that the tax was unconstitutional. A ruling by the high court is expected by September.
Sunday May 17
State Supreme Court to Hear Amusement Tax Arguments Monday Afternoon
It's a busy week for the dreaded Amusement Tax. Monday, May 18 the State Supreme Court in New Orleans will hear arguments in the case of the Cat's Meow, et al versus the City of New Orleans Amusement Tax. The case goes before the court at the request of the City of New Orleans as a result of the ruling in Civil District Court that the tax was unconstitutional. Attorneys Mitch Landrieu and Justin Zitler have prepared a strong case against the tax and the City's contention that the Home Rule Charter allows the city to impose any tax it sees fit to create. A ruling on the matter is expected by September.
Tuesday, May 19 the House Ways & Means Committee Will Hear HB 108,
Rep. Scalise's Bill to Repeal the Amusement Tax
The LMC urges all who care to see an end to the Amusement Tax to be in the state capitol Tuesday, May 19. That's when the House Ways & Means Committee will hear House Bill 108 by Rep. Steve Scalise that seeks to repeal the tax. The committee has been very tough on bills that seek to repeal or reduce taxes, so this is by no means a cakewalk. Stay tuned!
Revised Amusement Tax Makes N.O. the Only City in the USA to Tax Museums: Community Leaders Angry & Frustrated
An angry Warren Reuther left the City Council chambers after the 4 to 2 vote to pass the revised Amusement Tax saying that he could solve the financial shortfall by tapping into "10% of the money the city pays for consultants," departing council member Peggy Wilson heartily agreed. Representatives of the Morial Convention Center, Audubon Institute, Contemporary Arts Center and University of New Orleans were equally frustrated and unhappy with the turn of events. The revised tax, which removes all exemptions except those mandated by state law, will make New Orleans the only city in the USA to tax museums, the aquarium and zoo, the carousel at City Park and potentially hundreds of other much smaller entities. We've posted a special page called "Lowlights of the Revised Amusement Tax" for all to see. This page contains text from the tax. Read it and then write to Mayor Marc Morial (City Hall, Room 2-E-10, New Orleans LA 70112) and tell him what you think of this unbelievable situation.
Community outrage is growing. The LMC received calls from many people wanting to help with the fight against this onerous and foolish tax. A roundtable discussion on local television is in the works, and council member Troy Carter, who opposes the tax, has publicly vowed to continue to fight to repeal the tax. Stay tuned!
Orleans City Council Votes to Tax Jazz, Museums, Aquarium &
Amusement Tax Exemptions Eliminated, Tax Lowered to 2%
In a move certain to create more problems than it solved, the New Orleans City Council voted 4 to 2 to accept a revised Amusement Tax ordinance that eliminated all exemptions except those created by state law and that lowers the tax to 2%. Though clubs and other entities already paying the tax will be pleased to be paying less, other valuable community institutions such as museums, the Aquarium of the Americas, zoo, UNO Lakefront Arena, Morial Convention Center, Contemporary Arts Center--even the carousel at City Park--are all now eligible to be taxed.
A who's who of representatives from the arts community, tourism and the nonprofit sector spoke against the tax, including Ron Foreman of the Audubon Institute, Warren Reuther of New Orleans Paddlewheels, John Bullard of the New Orleans Museum of Art, Jay Weigel of the Contemporary Arts Center (also a member of the LMC), Bernie Cyrus, a representative of the University of New Orleans and more. There were no speakers--other than City officials--who supported the tax.
The implications of reinstating the Amusement Tax in such a broad fashion are certainly on the minds of many community leaders as the possibility of having to pay any percentage creates a permanent wound on already stretched budgets and threatens the health of many of these important institutions. Indeed, this could make New Orleans the only city in America to tax museums and related entities. One representative of the Audubon Institute noted that describing the zoo as an "amusement" threatens future funding since it redefines the zoo and could jeopardize accreditation by funding sources.
The action by the City did not cause City Attorney Avis Russell to withdraw from the appeal to the Louisiana State Supreme Court in the case versus the Cat's Meow. Speculation also centers around the fact that the ordinance, as passed, might affect the case since the city has now created an ordinance that adheres to the state enabling legislation; thus, the city is now not in violation of state law.
Most agree that this complicated situation has only worsened with passage of today's ordinance. The new Amusement Tax ordinance becomes effective June 1, but only after Mayor Marc Morial signs it. We hope he thinks long and hard before putting his name on this document. This story will be updated as information becomes available.
Amusement Tax Oral Arguments
Before La Supreme Court May 18
New Amusement Tax Ordinance on Thurs April 16 City Council Agenda
The Louisiana Supreme Court is moving swiftly in hearing oral arguments in the case of the Cat's Meow vs. the City of New Orleans Amusement Tax. The court will hear arguments from attorneys on each side of the issue on May 18. The City of New Orleans filed a 10 page brief in support of the tax, stating simply that the Home Rule Charter allows the City to create and collect any tax or fee it deems necessary. Opponents were surprised by both the brevity and foundation for the brief, since taking a stand on the Home Rule Charter could affect other unrelated issues and put the City in difficult situation. In other words, the brief puts the City's eggs in one basket, always a dangerous strategy. One opponent characterized the City's stance as "creating an Athenian city-state" with the ability to create taxes and fees as it sees fit. Should be an interesting civics lesson for all involved.
On another front, as we noted in a previous story, the revised Amusement Tax ordinance drafted by Councilman Jim Singleton is on the agenda for the New Orleans City Council meeting this Thursday, April 16, time unknown. Controversial issues like the Amusement Tax are often deferred, so check with the Council Clerk at 565-6393 before heading for the Council chambers, or call the LMC at 838-5600. We urge everyone with an interest in this issue to attend the hearing.
Thursday April 2
New Orleans City Councilman Jim Singleton on March 19 introduced a new Amusement Tax ordinance. The new ordinance takes a cue from the LMC's recommendations of two years ago, and eliminates "certain exemptions" and reduces the tax to 2%. Tax opponents were not notified of Singleton's action, and opinions vary as to the chances of passage. The ordinance would only exempt: "1) any event held in the Louisiana Superdome; 2) any church fair, church card or lotto party, church lecture, church picnic, or any religious festival, all of the proceeds of which inure to the benefit of a religious institution; 3) any charitable benefit, the proceeds of which inure exclusively to the benefit of charitable institutions; 4) charged the students or members of the faculty of any school or university which charges an admission fee in connection with the activities of the school or university; 5) or ten cents or less charged children under the age of twelve." This strange concoction of exemptions does not include former exemptions granted the Audubon Institute, the Morial Convention Center and other certain-to-object entities. The ordinance cannot be heard by the Council until 30 days after introduction, which is no sooner than April 16. The LMC, along with attorney Justin Zitler, originally proposed a similar ordinance two years ago this month. Our recommendation, however, was for the tax to be only 1%, since elimination of the exemptions creates a much larger pool of money. Even at 1%, the tax would generate considerably more money than it does currently. This is a breaking story and will be updated as information becomes available.
Friday February 20
The City of New Orleans filed an emergency writ with the State Supreme Court to appeal Judge Robin Giarrusso's ruling that the Amusement Tax was unconstitutional (see yesterday's story). In a procedural victory that has no bearing on the merits of the case, the Court granted the City suspensive relief, meaning that the City can continue to collect the tax while it is appealed. In a rather disturbing aspect of the appeal, the attorney for the City "forgot" to notify opposing attorneys, Mitch Landrieu and Justin Zitler, of not only this appeal to the Supreme Court, but two other appeals that went before Judge Giarrusso that were denied. Though the City could face sanctions for this distasteful tactic, any fines levied against the City would result in more taxpayers' money being wasted.
Though this ruling represents a procedural victory for the City, the Court did not review the merits of the case and issued no ruling relating to whether Judge Giarrusso's original ruling that the tax was unconstitutional was to be upheld or overturned. Such a ruling by the Supreme Court will likely take many weeks. Stay tuned.
Thursday February 19
City Appeal of Amusement Tax Ruling Denied Again,
Seeking Supreme Court Ruling
In a story that goes on and on, the City of New Orleans again sought to have Judge Robin Giarrusso reconsider her ruling and grant Suspensive Relief during the appeal. A suspensive relief ruling would allow the City to collect the tax while the case is being appealed. Again, Judge Giarrusso denied the City's request. The City then filed an emergency writ with the State Supreme Court seeking suspensive relief. In filing this appeal, the City attorney somehow "forgot" to notify opposing attorneys, Mitch Landrieu and Justin Zitler. Zitler learned of the appeal only yesterday afternoon and had less than 24 hours in which to prepare a response in time for today's noon hearing. We will update this story as soon as a ruling is given.
We are saddened that the City not only is appealing this ruling over the objections of the City Council, who passed a 4-3 motion to not appeal the Amusement Tax ruling, but that they would resort to such tactics as failing to properly notify opposing attorneys. How can the City proclaim itself to be the world's greatest music city and continue to abuse this resource and add insult to injury by using unfair tactics? We join Mayor Morial in his efforts to rebuild New Orleans, and only wish that those efforts would include the music community.
More Amusement Tax News: Request by City of N.O. for
New Trial and Stay Denied by Judge Giarrusso
Judge Robin Giarrusso has again dealt the City of New Orleans a blow by ruling against their request for both a new trial and a stay on her previous ruling that the Amusement Tax is unconstitutional. Judge Giarrusso "denied ex parte" (without a hearing) the City's motion. Her ruling "considered all of the City's arguments" and concluded "This Court declines to stay the enforcement of an unconstitutional tax."
According to our sources, the City will utilize a little-known rule that allows them to appeal directly to the state Supreme Court. Such an appeal will likely take several months. We urge the music community to write letters to local newspapers thanking Judge Giarrusso and the Cat's Meow, and urging the City to see the light on this issue. The music industry needs to be nurtured, not taxed. We need incentives, not disincentives. The music community needs to pull together on this issue.
Amusement Tax Declared Unconstitutional
FINAL UPDATE (WE HOPE!): Judge Robin M. Giarrusso on Monday granted a Motion for Summary Judgment against the City of New Orleans Amusement Tax. This means that Judge Giarrusso feels that the case presented against the tax by attorneys Mitch Landrieu and Justin Zitler has merit and that the tax is indeed unconstitutional because the Amusement Tax ordinance is inconsistent with the state statute authorizing its imposition. The actual ruling reads: "it is further ordered, adjudged and decreed that the Motion for Summary Judgment is hereby granted decreeing the entirety of the Municipal Ordinance known as the Amusement Tax, as amended and as applied, comprising Chapter 6 of the Code of the City of New Orleans, unconstitutional."
The ruling can be appealed by the City, whether they choose to take that route is unknown. The case was brought against the City by the Cat's Meow, a popular Bourbon Street karaoke club. A press conference was held Monday at Cat's Meow followed immediately by a press conference called by the mayor at City Hall. Mayor Morial said that he "vigorously disagrees" with the ruling, stating that he believes the City has every right to tinker with the enabling legislation (a bill passed by the state that "enables" the city to collect the tax) to create exemptions above and beyond those outlined by the state. Morial also felt that the music industry should help him find ways to fund the city's Human Services division, the recipient of the tax.
LMC Chairman Ellis Marsalis called music "a cornerstone of tourism" and said the ruling "great news." The LMC has long held that the Amusement Tax was an impediment to the development and growth of live music venues in the City of New Orleans.
EDITORIAL: The LMC has been fighting the Amusement Tax for more than 5 years. We are thrilled that it has finally been eliminated, thanks to Judge Robin Giarrusso, the Cat's Meow and attorneys Mitch Landrieu and Justin Zitler. What is disturbing is that the mayor thinks the music industry has an exceptional obligation to support the city's welfare efforts. Evidently, he believes the music industry is a monolithic, fantastically successful industry flush enough to find ways to support the poor of the community. Well, as anyone who ever tried to make a living as a musician knows, musicians struggle to make a living, and most music clubs struggle to make ends meet. It's a cliche, but like the old African proverb says, "It takes a village...." and it takes the entire community to support the city's welfare system. The mayor has had more than three years to work on this issue. In the meantime, our fragile music industry has continued to struggle under this unfair burden. Now that the tax is dead, we're confident that more people will be willing to take a chance with live music. And that's the best news of all.
Tuesday December 16
Amusement Tax Hearing Takes Place as
City Announces Major Plans to Celebrate Music
EDITORIAL: As attorneys Justin Zitler and Mitch Landrieu were explaining to Judge Robin Giarrusso how the onerous City of New Orleans Amusement Tax was unfairly draining the life out of the live music industry in America's most musical city, Mayor Marc Morial was holding a press conference to announce a major investment in a three year celebration of music and culture based on 1998 being the 280th anniversary of New Orleans and 1999 being the 300th anniversary of French settlement in the region. This irony highlights the strange qualities of the administration's support of music: while bleeding it they tout it; and this time plan on spending--according to our sources--a third of the amount alleged to be raised annually by the tax on live music venues.
While a city attorney weakly defended the tax in Civil District Court, four blocks away at historic Gallier Hall the Mayor was proclaiming an unprecedented celebration of music. Apparently, it will take a judge to force the city to do right by music. SP
Judge Hears Amusement Tax Plea, Will Rule Soon
Attorneys Justin Zitler and Mitch Landrieu painted a picture of a city ordinance gone haywire in today's hearing on the Amusement Tax. Judge Robin Giarrusso listened intently, asked few questions, and stated that she would take the matter under advisement and give a ruling, hopefully in a couple of days. The attorney representing the City presented few legally supported arguments, stating only that the City had a right to create the patchwork-quilt of exemptions under the Home Rule charter. The hearing was well covered by the local media and was attended by several local music activists. "This would be a great Christmas present," said Bernie Cyrus after the hearing. The judge will be ruling on whether the tax in its present form is constitutional. As originally written nearly 60 years ago, the tax ordinance allowed for far more thorough taxation of amusements and events. Over the years exemptions have whittled away at the tax base so that today, only clubs with less than 1800 seats pay the tax. Larger venues are exempt, as are all public facilities. Additionally, the tax is paid by movie theaters and video rental stores. For clubs, the tax is an additional 5% (on top of the existing 9% sales tax) of gross revenues. The LMC has fought against the tax for more than 5 years, contending that the tax is an impediment to the development of critical small live music venues.
Wednesday December 3
Optimism is running high that the dreaded City of New Orleans Amusement Tax on live music might be meeting its match in attorneys Justin Zitler and Mitch Landrieu. The two have prepared a lengthy brief seeking a Summary Judgment that will be reviewed in Civil District Court in New Orleans on Monday December 15 at 9 am. Judge Robin M. Giarrusso will decide whether the request for a Summary Judgment is valid. If Judge Giarrusso agrees with the plaintiffs, the Amusement Tax will be dead. Anyone interested in this issue is asked to be in court to show support. The Civil District Court is located at the corner of Poydras and Loyola and Judge Giarrusso's court is on the 4th floor.
FOR IMMEDIATE RELEASE
APRIL 16, 1998
N.O. City Council Votes to Tax Jazz, Museums & More:
Revised Amusement Tax Passed, Lowers Tax to 2%
(NEW ORLEANS) Thursday, April 16, 1998--In a move that could make it the first city in the country to tax both music and museums, the New Orleans City Council approved Councilman Jim Singleton's revised Amusement Tax ordinance which eliminated all previous exemptions to the tax except those mandated by state law, and lowered the tax from 5% to 2%. The move, widely seen as creating a bigger problem than it solved, was made by the Council in desperation to preserve a revenue stream that supports the city's Human Services Department (formerly the Welfare Department).
"This tax continues to threaten the local music industry," said Louisiana Music Commission Executive Director, Bernie Cyrus. "We can't support even 1/10 of 1% of any tax on music." Others spoke of the number of jobs threatened by the tax. Warren Reuther, whose company, New Orleans Paddlewheels, had previously been exempted from the tax, noted that upon receiving the exemption he hired more musicians to work more cruises, and now employs as many as six bands a day on busy days. Elimination of the jazz exemption, he said, would cause layoffs at his company.
Other representatives of arts organizations, museums and nonprofits spoke at the council meeting. Ron Foreman, CEO of the Audubon Institute which operates the Aquarium of the Americas and the Audubon Zoo, noted that the tax would greatly affect the institute's revenue stream, threatening many important projects. One representative of the institute said that describing the Audubon Zoo as an "amusement" could threaten accreditation by international zoological organizations and thus funding by those organizations.
The Amusement Tax is a 68 year old ordinance that taxes: games of skill, games of chance, flying horses, freak shows, minstrel shows, musical performances, addresses, lectures, flower shows, cabarets and many other obscure items appropriate to the 1930s when the ordinance was drafted. Its purpose was to support "public and quasi-public charities." It now is dedicated to funding the city's welfare efforts. The tax, previously set at 5% of gross revenues, is basically a consumption tax that has, until today, been imposed only on music clubs with less than 1800 fixed seats, movie theaters, video rental stores, and a few other businesses. Because of the many exemptions, including the Superdome (mandated by state law), the Saenger Theater, traditional jazz clubs in the French Quarter and a few other exceptions, less than 160 businesses in Orleans Parish were subject to the tax which is estimated to generate approximately $2 million a year&emdash;though the city's Finance Office has never presented an accurate accounting.
Today's meeting was attended by representatives of the New Orleans Museum of Art, the Contemporary Arts Center, University of New Orleans, Morial Convention Center, Louisiana State Museum, Friends of the Cabildo and more. All agreed that today's action was a blow to the efforts of nonprofit institutions in New Orleans. Council member Peggy Wilson, a longtime opponent of the tax and facing her last days on the council (she was defeated in a recent election) lambasted the tax and the city for failing to stem growth in other departments. She was joined in opposition only by Councilman Troy Carter in the 4 to 2 vote.
The Louisiana Music Commission (LMC) has opposed the tax for the past six years, arguing that live music needs economic incentives, not onerous taxation, if it is to thrive. At a city council meeting two years ago, the LMC, with the pro bono assistance of attorney Justin Zitler, convinced the council to exempt live music from the tax. An amendment was added that the exemption would not become effective until the city found a revenue source to replace the tax. Over the past two years, city revenues have increased and other city departments have expanded. The LMC has continually sought to get the exemption enacted, with no success.
More recently, the Cat's Meow, said to be the second largest payer of the tax, filed a suit in Civil District Court. Judge Robin M. Giarrusso agreed with the Cat's Meow and declared the tax unconstitutional. The city then appealed to the State Supreme Court which will hear the case on May 18. Whether today's vote by the council affects that case is unknown.
The Amusement Tax has been unevenly enforced over the years, causing confusion as to exactly which revenues were subject to the tax. Some clubs only tallied the tax when live music was playing. Other tallied it only on door and drink receipts. The ordinance, however, defines "admissions" to included all revenues generated in the venue, thus making the tax a consumption tax similar to a sales tax. With a 9.5% existing sales tax rate in Orleans Parish, and the additional 5% Amusement Tax, small music clubs were faced with a total tax bite of 14.5% of gross revenues. Audits by the city have closed clubs and caused others to face tax bills ranging from $20,000 to $150,000. The revised tax eliminated all exemptions, including the New Orleans Jazz & Heritage Festival, which formerly had enjoyed an exemption granted all nonprofits. However many legal questions remain.
The LMC has long advocated that the tax was a strong disincentive to the development of live music clubs, and threatens the reputation of New Orleans as an incubator of America's rich music legacy. In October, 1996, LMC Chairman Ellis Marsalis wrote to Mayor Marc Morial that "I believe it is time for us all to stand up for our cultural legacy of music and put an end to this tax." The LMC is a state agency within the Department of Economic Development. It's mission is to promote and develop popular commercial music and related industries in Louisiana.
FOR IMMEDIATE RELEASE
FEBRUARY 3, 1998
Judge Robin Giarrusso Denies City Request for New Trial and Stay of Amusement Tax Ruling
(NEW ORLEANS) February 3, 1998--Judge Robin Giarrusso today denied a motion by the City of New Orleans that a new trial be held in the case of the Cat's Meow versus the City of New Orleans Amusement Tax. Judge Giarrusso upheld her previous ruling that the tax ordinance in its entirety was unconstitutional. In today's ruling she also stated that the Court "declines to stay the enforcement of an unconstitutional tax."
The City is planning an appeal to a higher court. However, tonight, during a council-at-large debate televised on WWL TV, Councilmember Peggy Wilson, a longtime opponent of the tax, pledged to have the City Council vote on whether the administration should appeal the process. It is unknown at this time how other council members would vote on such a proposition.
Judge Giarrusso ruled the tax was unconstitutional only a week ago, and the City's request for a new trail was expected. Attorneys for the Cat's Meow, Mitch Landrieu and Justin Zitler, are anticipating an appeal, perhaps to the state Supreme Court.
The Louisiana Music Commission has long held that the tax is an economic disincentive to the development of live music in New Orleans.
FOR IMMEDIATE RELEASE
JANUARY 26, 1998
New Orleans Amusement Tax Declared Unconstitutional
(NEW ORLEANS) Monday, January 26, 1998--Judge Robin M. Giarrusso today declared the City of New Orleans Amusement Tax, which levied an additional 5% tax burden on live music clubs with less than 1800 seats, unconstitutional.
Attorneys Mitch Landrieu and Justin Zitler, representing the Cat's Meow, a popular karaoke club on Bourbon Street, on December 15, 1997 appeared in Court seeking a Motion for Summary Judgment that the tax be declared unconstitutional. Judge Giarrusso agreed with the plaintiff and granted the motion in a ruling signed today.
"This is great news," said Ellis Marsalis, Chairman of the Louisiana Music Commission (LMC). "We've fought against this impediment to live music for more than five years. Now New Orleans will be able to maximize its live music industry and invite investment."
"There is no reason why New Orleans can't have the significant live music industry that we see in Branson, Missouri," LMC Executive Director Bernie Cyrus said. "This tax has been the biggest obstacle to the growth and success of live music. I believe the New Orleans music industry will now experience a renaissance."
The LMC has long contended that elimination of the tax would result in an increase in the number of live music clubs in the city and a growth in sales tax revenues that would offset the loss of Amusement tax revenues.
FOR IMMEDIATE RELEASE
OCTOBER 23, 1996
LMC Chairman Marsalis
Calls for End to Music Tax
(October 23, 1996) NEW ORLEANS--Ellis L. Marsalis Jr., chairman of the Louisiana Music Commission, in a memo to Mayor Marc Morial, has called for an end to the Amusement Tax on live music. According to Marsalis, this tax has plagued the city's vital music industry for 60 years.
Citing a recent report from the Revenue Estimating Conference that indicated substantially higher revenue projections for the city, Marsalis asked the Mayor to formally rescind the tax in time for the holiday season, adding that such an act, "would indeed be the best present the City could give to our live music industry."
"This tax, which is only imposed on smaller clubs, is stifling the development of the live music industry," Marsalis said today. "I believe it is time for all of us to stand up for our cultural legacy of music and put an end to this tax."
Bernie Cyrus, executive director of the LMC said, "For 60 years now, we've allowed this tax to drain part of the life out of the music industry in New Orleans. Now that the city can prove it has the revenues to make up for the live music exemption, there's no excuse for keeping this tax."
"I believe Mayor Morial is dedicated to the business of music, which is truly the roux in his Gumbo Coalition. The LMC has offered the city solutions to this problem and we've worked hard to prove that this tax is stifling the development of live music. The Council voted unanimously to exempt live music, now it's time for the administration to step up to the plate and prove their commitment to this industry," Cyrus added.
Cyrus and attorney Justin Zitler appeared before the City Council on several occasions as part of the effort to repeal the tax. At an April meeting, after an unprecedented appearance by the Wild Magnolias, the Council voted unanimously to exempt live music. However, an amendment was added saying that the exemption would not take effect until the administration found the money in recurring revenues to replace the resulting shortfall. The amendment at first stated that the funds must come from "new recurring revenues," but the Council later agreed with Cyrus and Zitler and voted to remove the word "new," which then placed the burden on the administration to find the money in the existing revenue stream.
According to the city's Finance Department, live music clubs generated approximately $900,000 which partially funds the city's Human Services Department, formerly called the Welfare Department.
A recent news story reported that the City will have at least $2.5 million in increased sales tax revenues which contributed to a projection of $71 million in new revenues for the upcoming budget.
Ellis L. Marsalis Jr. was appointed Chairman of the Louisiana Music Commission in 1992. He has directed the Jazz Studies program at the University of New Orleans since its inception and is credited with being one of the most influential music educators in American history. He is the patriarch of America's first family of jazz, which includes sons Branford, Wynton, Delfeayo and Jason Marsalis, all accomplished and successful jazz musicians.
The Louisiana Music Commission was founded in 1979, and was the first state music commission formed in the United States. The fifteen unpaid members of the commission are appointed by the Governor and include Art Neville, Irma Thomas, Jean Knight, David Torkanowsky, Wayne Toups and several other prominent members of the state's music community. The LMC is dedicated to promoting and developing Louisiana's music industry.
The text of the Marsalis memo to Mayor Morial follows:
Now that the Revenue Estimating Conference has projected a significant increase in revenues for the City of New Orleans, the 1997 budget ordinance will appropriate sufficient recurring revenue to cover the estimated cost of the live music exemption from the Amusement Tax.
I believe it's time to give the local music industry the boost it needs and formally end collection of the tax on the first day of the month following the effective date of the budget ordinance. Such an action, taken during the upcoming holiday season, would indeed be the best present the City could give to our live music industry.
The Louisiana Music Commission would be happy to join you in a press conference when the tax is formally rescinded, and present both you and the Council with official "Music Decrees" honoring you for your commitment to our great musical heritage.
I urge you to take action now, and end this embarrassing tax on what the world knows is our greatest natural resource&emdash;music!
Lowlights of the City of New Orleans Amusement Tax Ordinance
Adopted by the City Council, Thur. April 16, 1998
Based on the 68 Year Old Amusement Tax Ordinance which formerly was collected only from music clubs with less than 1800 fixed seats, movie theaters and video rental stores. Previous exemptions included all public facilities, all nonprofits, "bona fide" jazz clubs in the French Quarter, and excursion boats. A lawsuit challenged the uneven implementation; and, the tax was declared unconstitutional and is under appeal to the State Supreme Court. This revised ordinance is an attempt by City Council to meet the letter of the law to help prevail in the appeal; however, the city attorney's office didn't do all their homework, because this revision does not accurately reflect the state mandated exemptions for the Superdome. Read on and try not to laugh too loud, because this really isn't very amusing.
Text from the tax:
"Admissions" includes all amounts paid for admission, season tickets, refreshments, service and merchandise...[and] any basic membership fee...
There is hereby levied a tax for the purpose of providing funds for public and quasipublic [sic] charitable institutions operated by the Department of Human Services [formerly called the Welfare Department] and, upon a surplus of such funds, to human services programs as determined by the council as authorized...The tax shall be two percent [2%] on gross receipts representing admission charges to any theatre, motion picture house, athletic contest, exhibition, pageant, production, demonstration, flower show, concert, musicale, recital, circus, freak show, minstrel show, lecture, address, nightclub, cabaret, dance, dancehall, restaurant which provides either floor show, singing, dancing or dancing facilities to patrons; excursion and sightseeing steamer which receives and discharges passengers in the same parish or municipality, aviation pleasure ride that takes on and discharges passengers in the same parish or municipality, scenic railway, flying horse or merry-go-round, shooting gallery and any game of skill and chance as well as all mechanical devices operated for pleasure or skill where a fee is charged for admission or entrance or for the purpose of playing them or whether there is any charge whatever for them or in connection with them either directly or indirectly or where admission is had by a season ticket or membership.
No tax shall be levied under this article with respect to any admissions:
1) to any event in held in the Louisiana Superdome**
2) to any church fair, church card or lotto party, church lecture, church picnic, or any religious festival, all of the proceeds of which inure to the benefit of a religious institution.
3) to any charitable benefit, the proceeds of which inure exclusively to the benefit of charitable institutions.
4) charged the students or members of the faculty of any school or university which charges an admission fee in connection with the activities of the school or university.
5) or ten cents or less charged to children under the age of twelve.
*NOTE: These exemptions are basically those in the state enabling legislation that makes it possible for the city to collect the tax. As noted above, the author of the revised ordinance missed relevant details contained in the Superdome exemptions, and possibly other critical terminology. A case against this tax will be argued in the afternoon session of the Louisiana State Supreme Court on Monday, May 18, 1998.
**Note: this greatly expands the exemptions spelled out by state law. Previously, only events which utilized the fixed seats in the dome were exempt. Thus the council has further eroded its own arguments regarding taxation of the dome.
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Louisiana Music Commission
3330 N. Causeway Blvd. Suite 438
Metairie LA 70002
Phone: 504-838-5600 Fax: 504-838-5280
©1997, 1998 Louisiana Music Commission
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