Them's the breaks
The St. Louis Board of Alderman went to the mat for boxing promoters this past week.
Despite Aldermanic President Jim Shrewsbury's opposition, a bill that would exempt boxing matches held in the city from paying the 5% entertainment tax sailed through the board.
Shrewsbury argued that the exemption opens the flood gates for other groups to demand the same treatment. He placed the source of the Board's move on noted boxing and personal promoter Don King. Shrewsbury said King lamented paying $88,000 in taxes after raking in $1.8 million in one night.
An industry that is unlikely to generate the continued draw of the Corey Spinks fight is not a good candidate for the tax break. Occasional large matches will make money, but the majority of the fights will reflect the national reality of boxing, declining numbers of fans and falling revenue.
A reduction in the tax might make sense once there is track record of successful matches that bring in enough people. The Cardinals have such an agreement and the Blues are likely to seek a similar deal.
Events that draw tens of thousands of people on a weekly basis and inject millions into the city's economy are valid candidates for tax reductions.
Promoters and anti-tax proponents may try and argue that the tax is a drag on the growth of the sport in St. Louis, but as Steven Smith's successful Hoosierweight Boxing enterprise and other local boxing events show, the tax has not driven boxing out of the city.
The Spinks fight was not successful despite the tax. Don King and Corey Spinks made it a successful event and it was a great feather for St. Louis' cap. It brought attention to St. Louis and got people talking about boxing again.
Until the industry shows a track record of success it should pay the same tax that other groups holding events in the city must pay.
It would be fantastic to see St. Louis become a center for boxing but the Aldermen who are responsible for guiding the city through its financial woes should not pin their dreams on a single success.
Correction: Corrected the fight night figures above. - Matthew
Any idea how much the 5% brings in dollar terms per year?
The tax provides ammunition to those who say that the city is too expensive to do business in, though I doubt the tax is pivotal in booking decisions.
Shrewsbury is right about the floodgates being opened, but maybe the tax should go.
Any breakdown of the vote?
Posted by Max Baer, Jr. on Mon., Jul 18, 2005 at 8:44 AMDoes Don King owe the city 1% earnings tax on the million dollars in profit he made from the Spinks match?
What about the fighters themselves? Do they owe the city earnings tax?
RB
Posted by rick on Mon., Jul 18, 2005 at 1:38 PMLets think abou this issue before we get our panties in a knot...
Other than the Spinks match, Guns and Hoses which is a charity event and probably not taxed, and the Hoosierweight boxing which probably is not a giant revenue stream, what other boxing matches has St. Louis had??? Does anyone know, I don't know for sure but it might be zero. If that is the case, than a small tax break to promote something that brings people to the city, to downtown, to bars and resturants and the city still sees its taste through normal sales tax, is that all that bad???
Posted by The Southsider on Mon., Jul 18, 2005 at 4:18 PMYeah, I have had a great amount of cooperation from the city on the fights. However, I got jammed up on this amusement tax- a tax that the cardinals are getting right back. The thing is, after I paid the tax like a good citizen does when demanded by the city gov, I found out that no other amateur boxing promoter who holds events in the city has ever paid this tax. Apparently amateur boxing is exempt through the USA boxing regs. Several of the other big promoters in town told me that I shouldn't have paid it. Now I feel like a sucker.
Posted by Steven Smith on Tue., Jul 19, 2005 at 12:24 AMYeah, I have had a great amount of cooperation from the city on the fights. However, I got jammed up on this amusement tax- a tax that the cardinals are getting right back. The thing is, after I paid the tax like a good citizen does when demanded by the city gov, I found out that no other amateur boxing promoter who holds events in the city has ever paid this tax. Apparently amateur boxing is exempt through the USA boxing regs. Several of the other big promoters in town told me that I shouldn't have paid it. Now I feel like a sucker.
Posted by Steven Smith on Tue., Jul 19, 2005 at 12:30 AMTarget tax breaks can be effective ways to bring events to the city. However, it doesn't strike me as good policy to base changes on one event.
If the city wants to sit down with promoters of professional fights (amateur boxing being exempt as Steve Smith pointed out above) and work out a deal that would provide tax breaks after being shown plans that would bring a number of events to the city, that would make sense.
If the city simply drops the tax on the boxing industry following one successful event, how can it justify taxing other groups holding events in the city? The promoters also face a sales tax and an athletics tax. Should those also be dropped?
Tax breaks can be effective tools if used correctly. However, given the delicate nature of taxation and tax breaks, the decisions must be the result of careful consideration.
Posted by Matthew on Tue., Jul 19, 2005 at 5:55 PMTo put this in context, I believe part of the "financing" package for the new Busch Stadium exempts the Cardinals from the ticket tax, at least that was my interpretation. Meanwhile, Comptroller Green recently issued a press release talking about how the amusement tax revenues and parking tax revenues are DOWN, primarily because of the NHL strike.
So, I can imagine the amusement tax will gradually be eliminated, as each relevant 'industry' agitates for it. First the Cards, now pro boxing, next the Blues?
Posted by Joe Frank on Wed., Jul 20, 2005 at 9:50 AMMore on BB #150, to exempt boxing from ticket tax:
http://stlcin.missouri.org/alderman/bbDetail.cfm?BBId=499
Primary Sponsor: Conway
Co-sponsors (from the bill text):
Kirner, Gregali, Griffin, Hanrahan, Flowers, Bosley, Shelton, Reed, Ortmann, Florida, McMillan, Boyd, Krewson, Williamson
From July 15th minutes:
"Mr. Conway moved for third reading and final passage of Board Bill #150
Seconded by Mr. Ortmann
Carried by the following vote:
ayes: Troupe, Bosley, Reed, Conway, Ortmann, Vollmer, Villa, Florida, Roddy, Kennedy,
McMillan, Schmid, Hanrahan, Bauer, Kirner, Williamson, Carter, Krewson. 19
noes: Young, Heitert, Jones-King, President Shrewsbury. 4
present:0"
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