An amusement tax dispute over Lehigh Gorge Scenic Railway train rides in Jim Thorpe has come to an end, thanks in large part to new state legislation.

Gov. Tom Wolf signed Senate Bill 1188 last week, part of which states the amusement tax doesn’t apply to primarily freight railroads such as Reading and Northern Railroad, which run the rides out of Jim Thorpe.

According to a press release from the railroad on Monday, the passenger trains will return to town on Aug. 14.

“Over the past year, we have refurbished our equipment and worked on restoring a second steam locomotive,” Reading and Northern CEO Andy Muller said.

“We are now ready to resume passenger service to and from Jim Thorpe. We have always worked well with the merchants in Jim Thorpe and we are pleased to do our part to help Jim Thorpe, Carbon County and the region bounce back from the impact of the virus on our communities.”

History

The dispute goes back to 2011 when Jim Thorpe’s tax collector notified the railroad it was subject to the amusement tax. The railroad, however, claimed it was exempt under a federal transportation statute.

The railroad was added to the delinquent tax rolls in 2017. A complaint was filed with the local district justice, who determined the railroad had failed to comply with the amusement tax ordinance. The railroad appealed the decision to the Carbon County Court of Common Pleas in 2019.

Berkheimer, the tax collection agency representing Jim Thorpe borough, sought nearly $100,000 in unpaid amusement taxes for the past three years, leading to train’s decision to stop the rides in late 2019, including the popular Santa trains in December.

Soon after the train made its announcement, the two sides met on multiple occasions, with the borough eventually agreeing to drop the lawsuit.

After both sides had seemingly reached an understanding, the railroad did run its passenger service during the Winter Festival in February.

In early May, the borough and the operator of the Lehigh Gorge Scenic Railway issued dueling press releases both pointing the finger at the other in the continuation of a multiple-year dispute over amusement taxes.

The borough said it had given into the train company’s requests that Reading and Northern Railroad would not make any contribution to the borough toward the amusement tax or any similar contribution; that the borough amend its ordinance to exempt the railroad from the amusement tax; and that the borough agree not to reinstitute the lawsuit against the railroad.

The train station, however, sought language changes to the agreement.

Senate Bill 1188

State Sen. John Blake introduced the bill, which clarifies that local taxes authorized by Act 47, Act 205, or home rule powers shall not be included in the calculation of Act 511 aggregate tax limits.

State Sen. Dave Argall, however, offered the amendment, dealing with amusement tax.

The amendment prohibits a local taxing authority such as Jim Thorpe Borough from levying, assessing or collecting an amusement or admission tax based on a charge imposed for the movement of passengers by a for-profit railroad that operates as a common carrier of freight provided that the railroad is subject to the jurisdiction of the United State Surface Transportation Board, the freight constitutes a majority of the movement handled by the railroad measured by both income and volume, and the for-profit railroad transports more than 20,000 revenue carloads annually while offering tourist or passenger service.

“I’ve been reading for months in our local newspapers that communities are faced with conflicting legal opinions about whether or not each individual borough, city and township along a railroad can enact a separate tax on the railroad,” Argall, who represents all of Schuylkill County and parts of Berks County, said.

“Obviously, if this were to happen, it would kill any chance of attracting tourists in the future. This legislation, which was approved unanimously by the House, the Senate and the governor, was designed to clarify the situation and end the long and expensive legal disputes.”

Nobody voted against the bill in either the state House or Senate.

Asked if it applies to Reading and Northern, state Rep. Doyle Heffley said it is his understanding “the amusement tax won’t apply to primarily freight railroads.”

“It addressed a major issue and I’m happy it passed,” Heffley said. “I’m happy this is resolved.”

Heffley said the return of the train would improve the tourist experience in Jim Thorpe.

“I think we’ll look at this 10 to 20 years from now and realize how important it was to keep the trains here,” he said. “I hope going forward the relationship between the community and railroad continues to prosper.”

State Sen. John Yudichak said he welcomed the news that the Reading and Northern Railroad is bringing passenger trains back to Jim Thorpe.

“Pennsylvania has some of the finest scenic train rides in the country, and we are fortunate to have many of these scenic railroad operators, like the Reading & Northern, within a short drive of northeastern Pennsylvania,” Yudichak said. “My support of Senate Bill 1188 is an acknowledgment of the tremendous economic value Pennsylvania’s scenic railroads add to our local communities in terms of supporting local businesses, generating tax revenue, and creating new jobs.”

Jim Thorpe Borough Council President Greg Strubinger said the borough had no comment at this time.

Trains heading to Tamaqua

Reading and Northern finalized an agreement earlier this year to bring back passenger trains to Tamaqua’s 146-year-old train station, including the building of a new passenger platform.

While original terms were to provide the borough a discounted project cost of $36,000 payable over four years, Muller said the borough’s initial deposit of $20,000 served as payment in full.

He added that his vision had expanded to include decorative finishes such as protective but attractive fencing and Victorian-style lights. The railroad would assume any and all additional costs for construction.

Muller said the railroad would donate $10,000 per year for the next two years ($20,000 total) to Tamaqua Borough Council to distribute to local charities of choice.

The first $10,000 donation from Muller went to emergency services organizations in Tamaqua.

The return to Thorpe

Reading and Northern will be operating its Lehigh Gorge train on a schedule that will be published on Wednesday. Tickets will go on sale starting that date for upcoming trips.

For more information, call the passenger department at 570-325-8485 between 8:30 a.m. and 5 p.m. or follow the railroad by going to www.lgsry.com or “Lehigh Gorge Scenic Railway” on Facebook.

Given the COVID-19 virus, RBMN is proceeding with certain precautions to make guests feel more comfortable.

“We will be offering extra cars to allow empty seats and we welcome all of our guests to wear masks,” Muller said. “Our open air cars will be on the train offering guests open air seating.”