Businesses Resist As D.C. Collects On Ballpark Fee
Thursday, June 23, 2005
The District government's effort to collect the first installment of a business tax to build a new baseball stadium has outraged some company owners, confused others and renewed a political discussion about restructuring the tax.
An estimated 1,300 businesses that have gross receipts of $5 million or more will be expected to pay the tax, or ballpark fee, said city officials, who mailed out the bills this month. The fees, which initially were due June 15, range from $5,500 to $16,500 depending on the size of a company. The city's Office of Tax and Revenue has granted a two-week filing extension to June 30, which will allow businesses to obtain more information about the filing process.
Objections to the tax bills came quickly.
Warren J. Cox, a principal in Hartman-Cox Architects, said he did not closely follow the stadium debate in the fall and was shocked last week when his accountant asked him to approve a $10,800 check to the District. He dashed off a letter to D.C. Council members saying he was paying under protest and was considering legal action.
"When I told my partners, they had apoplexy. That's a lot of money," Cox said in an interview.
Representatives from the D.C. Chamber of Commerce met last week with city leaders to express their concerns about the fee structure.
In response, D.C. Council Chairman Linda W. Cropp (D) said yesterday that she might revisit the tax law this fall to make changes aimed at easing the burden on some businesses.
Mayor Anthony A. Williams (D) proposed the gross receipts tax in the fall as a key element in his plan to fund a stadium on the Anacostia waterfront for the Washington Nationals.
Under his original proposal, the tax would have collected $26 million a year. But the council, under pressure from businesses, reduced that to $14 million. That money, along with funds from a utilities tax on businesses and federal buildings, an annual rent payment by the Nationals and a concessions tax, will be used to pay debt service on stadium construction bonds.
Officials said yesterday that the city could end up with more money from the ballpark fee than is necessary because they may have under-estimated the number of companies that will be required to pay. Officials declined to say what they would do with extra funds.
The tax bills rekindled the debate in which some company owners complained last fall that the tax represents an unfair subsidy to Major League Baseball.
"I was very much for the baseball team, but I am very much against the way the city proposed to raise funds to pay for it," said Dudley Dworken, who has operated Curtis Chevrolet in the District since 1966. He also owns a smaller car dealership and paid more than $21,000 in gross receipts taxes last week.