FORESTVILLE - A dispute between Big Diamond Speedway LLC and the Cass Township supervisors over a 10 percent amusement tax has been taken to the Schuylkill County Court of Common Pleas.
The raceway's attorney filed an appeal Monday asking the court to review the township ordinance that threatens the future of the business in its 40th year of operation.
The appeal was filed by attorney Paul R. Ober of Paul R. Ober & Associates, Reading, on behalf of Frederick and Krista Roehrig, owners of the raceway.
"It's too bad it got this far," Ober said Tuesday. "It should have been solved at 5 percent without all the brouhaha. My clients are spending a lot of money for no good reason."
Adopted in 1983, Cass Township's amusement tax ordinance called for 10 percent of admission fees to the raceway.
The appeal states the raceway could not afford to pay the 10 percent tax and a verbal agreement was reached in 1984 for 5 percent.
While none of the township supervisors from 1983 are alive to confirm a verbal agreement, the appeal contains a 1984 article from The Pottsville REPUBLICAN stating both sides agreed to 5 percent.
However, in a letter sent July 11 to Ober regarding a settlement, attorney Edward M. Brennan, Cass Township's solicitor, said if any verbal agreement had been made with the township in 1984, it was with Big Diamond Speedway Inc. and its president, Joanne Roehig. Brennan said Big Diamond Speedway LLC wasn't created until 2011.
"I can assure you no agreement exists between the township and Big Diamond Speedway LLC," Brennan said in the letter.
Brennan also said in the letter there is no way to verify the raceway was even paying the full 5 percent, since the payments were never audited and there was never a set method of collection, as the supervisors just accepted what was given to them.
"We worked with these folks and simply said we needed to verify these numbers," Brennan said Tuesday. "Then they got angry and Krista Roehrig went on television and said, 'This is going to get nasty.' "
In the letter, Brennan referred to the taxes that were collected when the Roehrigs leased the raceway from 2006 to 2010 to BD Raceway LLC, also known as the Bieber Group. He said tax collections in that time period were "significantly higher than what Roehrig is or was paying."
Brennan also states in the letter that Big Diamond owes the township $10,670.55 in taxes for 2011 and that the ordinance was modeled after a borough ordinance in Bechtelsville requiring Grandview Speedway Inc. to pay a 10 percent amusement tax.
"Our information is that Grandview pays a full 10 percent and that there is no separate contract with the Grandview operator," Brennan states in the letter. "The (township) supervisors' position is that if this type of ordinance is suitable for Grandview, then it should be suitable for your client as well."
Ober said Big Diamond's business relies on fortunate weather, which it did not have last year and had to cancel many events. He also said the Bieber Group was able to have more programs in addition to having excellent weather.
"The township said they were being ripped off and that was something that was not taken well by Krista and Fritz (Frederick) Roehrig and imputed the integrity of their business," Ober said.
On March 29, Cass Township adopted a new ordinance requiring 10 percent of admission fees and as well as payment from participants, such as pit crews. On July 26, the township made an addition to the ordinance placing the responsibility of payment of the tax on the owners and operators of the facility instead of the patrons.
"Everyone pays their taxes in Cass (Township). Big Diamond has to do the same," Brennan said Tuesday.
The appeal claims there is no authority in the Local Tax Enabling Act authorizing the township to levy the tax on a landowner. It also claims the township did not file a copy of the ordinance with the state Department of Community and Economic Development within 15 days as required by the act.
The appeal also claims the new township ordinances also violates the act, which states any municipality that had an amusement tax before Dec. 31, 1997, cannot exceed that rate, or 5 percent, whichever is greater. Any municipality that did not have an amusement tax before that time cannot levy the tax at a rate higher than 5 percent.
Brennan said since the original ordinance passed in 1983 called for 10 percent, an amusement tax for the township is allowed to reach that number.
However, Ober said the provision concerns the amount actually collected by the township.
"The truth is the township did not do their homework," Ober said Tuesday. "The act is very clear and is based on the effective rate of collection and not the ordinance. We are in a position to demonstrate that the township collected 5 percent."
Krista Roehig had previously said that if Big Diamond Speedway was forced to close, it would affect at least 53 other local businesses.
According to the ordinance's advertisement in The Republican-Herald in July, the township would lose $29,700 in expected annual tax revenue if the raceway were to close.
"They chose to go to litigation. That's their right," Brennan said Tuesday. "But obviously I think they are on loose footing. To say that a municipality cannot raise a tax is flat-out wrong. I'm confident in the end the courts will see we are just treating them like any other taxpayer."