HARRISBURG, Pa. (WHP) — The Harrisburg Midtown Art Center is responding to accusations that it took and withheld taxes.
Its response comes after city leaders commented on HMAC’s impending closure during a council meeting Tuesday night.
According to HMAC founder John Traynor, who spoke with CBS 21 News over the phone, the amusement tax, also known as the entertainment tax, hasn’t been paid for roughly three years because “we are a small business struggling in a tough economy.” He also said it’s because the city did not respond to their attempts to discuss next steps.
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However, city treasurer Dan Miller said paying the amusement tax is straightforward: it is 10% of every ticket sold and should be built into ticket prices. In other words, the tax is paid by the customer, not the venue, and is meant to be submitted to the city every month.
When CBS 21 asked Traynor where the money owed to the city was, there was no clear answer. Traynor argued that the 10% was taken from “gross sales” because an “entertainment tax is not a sales tax,” and that HMAC did not want customers to have to pay more for tickets.
Then he said HMAC was struggling post-COVID and that all of its revenue was used to cover expenses such as insurance, bands, and staff.
To avoid raising ticket prices, he said HMAC tried to refinance through grants and loans, but the effort failed because the city refused to issue the necessary permits and licenses (given the amusement tax still had not been paid). Without a valid health license, Traynor said the Pennsylvania Liquor Control Board would not renew HMAC’s liquor license.
CBS 21 News also found other documents online that suggest allegations of underage drinking, noise, and drugs contributed to the problem. It said the board will only consider renewal if HMAC meets conditions such as increasing security measures, using metal detectors, and installing ID scanners.
Traynor said he’s hopeful the city can work this out with the HMAC owners. He said if not, “nobody wins.”
CBS 21 News also received the following statement from the city solicitor, Neil Grover, on Wednesday evening:
The dispute regarding HMAC’s failure to pay their financial obligations to the City has gone on for years. There have been many meetings in the past and still, they have managed to pay next to nothing, failing to honor their obligations and breaking their promises, again and again and again and again, all while generated millions of dollars in revenue. This year, after another full year of ignoring their taxes and other obligations, the founder, Mr. Traynor, set forth what appears as the exact same proposal and promise from 1 year ago. This time, they suggest they will really do it, just as they said 1 year ago. HMAC has failed to honor their promises from a year ago. HMAC continued to ignore the debts owed the City for 12 more months. At the same tome HMAC continued to generate revenue. They have abused trust, mistaken kindness for weakness, and over no valid basis for the City to continue to buy what they’re selling. HMAC collected actual tax dollars from their customers. The taxpayers paid. HMAC simply decided to keep it. That is not just unwise or wrong. It is illegal. And that is on top of the other routine obligations that is the cost of doing business they ignored. As HMAC and Mr. Traynor has repeatedly failed to honor their word and repeatedly ignored their legal obligations, ask the real question: Where did the millions of dollars they generated over the past few years actually go?
The City intends to find out.
‘ The preceding article may include information circulated by third parties ’
‘ Some details of this article were extracted from the following source local21news.com ’
