A golf course and other residents filed a legal challenge to an amusement tax enacted in Black Creek Twp.
Sugarloaf Golf Club said in a petition to Luzerne County Court that the tax ordinance is contrary to the state law in three ways.
The tax is 5% on all admissions for golfing and other amusements, but the state Local Tax Enabling Act limits the base against which amusement taxes are computed for golf courses to 40% of greens fees, the petition said.
While the township ordinance adds an interest charge of 0.5% per month to overdue taxes, the petition said the local tax law has no provisions for interest on late taxes.
State law said an amusement tax cannot take effect sooner than 30 days after it is adopted. Black Creek’s ordinance was enacted Dec. 11 and set to go into effect on Dec. 16 so the date must be modified, the petition said.
Although the ordinance was enacted in December, the township officials said they planned to start collecting the tax on Feb. 1 through Berkheimer Tax Associates. Township supervisors noted that other municipalities levy amusement taxes. They added an amusement tax to supplement revenues to help pay for repaving 33 miles of roads, which currently costs $200,000 per mile.
The tax applies to all amusements such as hunting clubs and adult entertainment clubs, and the ordinance charges businesses an annual fee for skill games of $500 per machine. But the general manager of Sugarloaf Golf Patrick Knelly estimated 90% of the revenues would come for the golf course and said the tax might force the business to stop offering its Christmas Light tour, which has a low profit margin.
Judge Tina Polachek Gartley scheduled a telephone hearing on the petition for March 2 and 11 a.m. and gave the township until Feb. 18 to respond to the golf club and other petitioners.
In addition to the golf club, petitioners appealing the tax are Judith and Wayne Knelly, Richard Michael, Vanessa Cook, Allen Whitenight, Larry Zemany Jr., Mellisa Zemany, Eric Zemany, Patricia Gans, Joseph Gans III, Joseph Gans V, Alyssa Garcia, Bianca Grey, Alan Santos, Gail Zola, Frank Kapes, Leighann Feola, David Hartz, Andrea Berta, John S. Berta, Amanda Watkins, Lorraine Gubala, Michael Felegie Jr. and Paul Morcom.
Paul DeAngelo also signed a verification for the petition as president of the golf club.
Each petitioner is a resident liable to pay tax on admission to amusements, a producer liable to collect the tax or both, the petition said.