
    CHIMNEY ROCK COMPANY v. THE UNITED STATES
    
    [No. F-50.
    Decided June 6, 1927]
    
      On the Proofs
    
    
      Admission tace; use of road as entrance to resort. — Where a fee is exacted of persons using a private road only when they enter a certain pleasure resort, and both road and resort are owned by the same company whose principal business is operating the resort, the fee so exacted is an admission fee and taxable as. such under the internal-revenue laws.
    
      The Reporter’s statement of the case:
    
      Mr. L. L. Hamby for the plaintiff.
    
      Mr. Joseph H. Sheppard, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    The court made special findings of fact, as follows:
    I. The plaintiff is and has been ever since the year 1916 a corporation organized and existing under and by virtue of the laws of the State of North Carolina, having its principal place of business at Chimney Rock, Rutherford County, in said State.
    II. The principal business of plaintiff since 1916 has been the operation of a resort in North Carolina, known as “ Chimney Rock.” The outstanding feature of interest at this resort is a natural peak or pinnacle rising to an elevation of several hundred feet, from the top of which the scenery of the surrounding country may be viewed to a distance of approximately seventy miles. At said resort plaintiff constructed and maintained a hotel, a pavilion, a restaurant, and an elaborate system of trails and stairways for the use of persons visiting its property. Plaintiff owned in fee about one hundred and eighty acres of land immediately adjacent to and surrounding Chimney Rock and also owned an easement over other lands not owned by plaintiff, said easement consisting of a right of way from the boundary of plaintiff’s land to the State highway between Asheville and Charlotte, North Carolina.
    III. As a part and parcel of the plaintiff’s resort it constructed an improved road over its own land and that which it had leased in perpetuity. This road is three miles in length, and runs from a river following the State highway between Asheville and Charlotte, North Carolina, north of ■Chimney Rock Mountain, and extending in a winding southerly direction up the mountain to a parking place at the base of what is known as the Chimney Rock Pinnacle or Cliff which rises abruptly for a distance of several hundred feet ■above the parking place. This road is a private road controlled by the plaintiff. The plaintiff exercises the right to refuse the use of this road to any person or persons whom the plaintiff may choose to exclude from the road.
    The plaintiff, under its charter from the State of North ■Carolina had the right “ to construct drives ” and “ to •charge reasonable tolls and fares to persons using or visiting its property.”
    IV. Since May 1, 1920, the plaintiff has charged to each person using this road one dollar. If a person gained entrance to Chimney Rock by any other road he was required to pay the one dollar provided he used the said road in .leaving Chimney Rock. The charge was one dollar for each person using the road, whether on foot, or horseback, or in •a vehicle. If the vehicle contained more than one person, then each person therein was required to pay the dollar.
    The said parking place, as well as the top of Chimney Rock Mountain, was accessible by the use of roads as well as trails both to pedestrians as well as to vehicular traffic without the necessity of one using the road constructed by the plaintiff, and to anyone so using such other roads or trails no charge was made by the plaintiff to any person who -entered its property and used its steps and trails or its parking place or any part of its property other than its road, and such persons were permitted, without charge, to .ascend to the top of Chimney Rock Cliff.
    At a point on said road about two and one-half miles from «the State highway and about one-half mile from Chimney Bock the plaintiff maintained a ticket office, which was open day and night, and in which was located its representative.. It was the duty of this agent of the plaintiff to collect from each person passing his office the sum of one dollar. Upon the payment of this fee a strip ticket was issued to the-patron, which ticket was collected by a representative of the plaintiff at a parking place at the base of Chimney Bock.. This ticket was good only on the day of its purchase and entitled the purchaser to parking space and to use the trails and stairways and visit the other points of interest provided by the plaintiff at its resort. Any person was allovred to travel from the State highway up to plaintiff’s ticket office,, approximately two and one-half miles, and return from that point over plaintiff’s road without being called upon to pay any sum, but if he passed the said ticket office to proceed to Chimney Bock he was obliged to pay the $1.
    V. No part of the property of the plaintiff on Chimney Bock Mountain was inclosed, nor did the plaintiff conduct any form of amusement on its property, which was operated as a health resort and as a place for parking and viewing,, from points provided by the plaintiff, the natural scenery.
    VI. Plaintiff was required by the collector of internal revenue for the western district of North Carolina and by the Commissioner of Internal Bevenue to collect admission taxes on the amount of said charges and to pay the same to the said collector, and the amounts so paid to the said collector-monthly from July 19, 1921, to June 20, 1925, aggregated. $14,896.56. Instead of requiring persons who used the said road to pay said taxes on the amount of its charge of $1.00,. the plaintiff, during the whole of the said period, elected to and did pay these taxes itself by reducing its charge to ninety-one cents, paying to the said collector ten cents upon each charge collected.
    Within four years next after the payment of the said taxes the plaintiff duly filed its appeal to the Commissioner of' Internal Bevenue for the refund thereof, but the said commissioner, on January 6, 1926, rejected the said claim.
    The court decided that plaintiff was not entitled to recover.
    
      
       Writ of certiorari denied.
    
   Hay, Judge,

delivered the opinion of the court:

The plaintiff is a corporation and conducts in the State of North Carolina a resort at Chimney Eock Mountain in said State. Under its charter it is given the right to engage in furnishing entertainment and amusement for the general public; to engage in the hotel and restaurant business, and to construct drives, paths, elevators, and scenic ways, and to charge reasonable tolls and fares to persons using and visiting its property. As a part of its resort it constructed an improved road over its own land and that which it had leased in perpetuity. This road is three miles in length and runs from a point in the State highway between Asheville and Charlotte, North Carolina, to a parking place at the base of Chimney Eock Mountain. This road is owned and controlled by the plaintiff, and the plaintiff exercises the right to exclude any and all persons from its use.

Since May 1, 1920, the plaintiff has charged to each person using this road one dollar, and this whether the person using the road was on foot or horseback, or in a vehicle. If the vehicle contained more than one person, then each person was required to pay the dollar. At a point on said road about two and one-half miles from the State highway and about one-half mile from the parking place the plaintiff' maintained a ticket office, which was open day and night and in which was located its representative. It was the duty of said representative to collect from each person passing his office the sum of one dollar. Upon its payment a strip ticket was issued to the person, which ticket was collected by the plaintiff’s representative at the aforesaid parking place. This ticket was good only on the day of its purchase, and entitled the purchaser to parking space and to use the trails and stairways and visit the points of interest provided by the plaintiff at its resort.

The plaintiff was required by the collector of internal revenue for the western district of North Carolina and by the Commissioner of Internal Eevenue to collect admission taxes on the amount of the charges made by it, and to pay the same to the said collector, and the amounts so paid to the said collector monthly from July 19, 1921, to June 20,. 1925, amounted to the sum of $14,896.56. Within four years next after the payment of said taxes the plaintiff duly filed its application with the Commissioner of Internal Revenue for the refund thereof, which application was rejected by the said commissioner on January 6, 1926.

The plaintiff is now suing in this court for said amount.

The. plaintiff contends that the charges upon which it was required to pay these taxes were toll charges, which it had the right to exact for the use of its road. The defendant maintains that the charges made by the plaintiff were admission charges to a place within the meaning and contemplation of the statutes providing for the collection of admission ■charges. The statutes involved are as follows:

Section 800 (a) of the revenue act of 1918, 40 Stat. 1057:

“ (1) A tax of 1 cent for each 10 cents or fraction thereof •of the amount paid for admission to any place on or after such date, including admission by season ticket or subscription, to be paid by the person paying for such admission ”; and section 800 (a) of the revenue act of 1921, 42 Stat. 227:
“ (1) A tax of 1 cent for each 10 cents or fraction thereof ■of the amount paid for admission to any place on or after such date, including admission by season ticket or subscription, to be paid by the person paying for such admission; but where the amount paid for admission is 10 cents or less, no tax shall be imposed.”

Section 500 (a) of the revenue act of 1924, 43 Stat. 253:

“ (1) A tax of 1 cent for each 10 cents or fraction thereof of the amount paid for admission to any place on or after ■such date, including admission by season ticket, or subscription, to be paid by the person paying for such admission; but where the amount paid for admission is 50 cents or less, no tax shall be imposed.”

The road here in question is a private road; it is not in the general acceptation of the word a toll road; it is owned and exclusively operated by the plaintiff for its own purposes, and the plaintiff exercises the right to exclude from its use any and all persons. The road is in effect an entrance to the plaintiff’s resort, and no person can be admitted to this resort without payment of a fee which the plaintiff exacts. The place to which admission is granted by the payment of this fee is one which is maintained for the amusement and entertainment of the general public, and is such a place as is contemplated by the statutes. The road is a source of revenue to the plaintiff and is an integral part of its resort. The charges are made, not as-tolls, but as entrance fees to a place of entertainment for the general public; this is demonstrated by the fact that these fees are required to be paid only when the person or persons using the road enter the resort. No charges are made for the use of two and one-half miles of the road. We are of opinion that these charges are admission fees and come within the provisions of the statutes.

The petition of the plaintiff must be dismissed. It is so ordered.

Moss, Judge; Booth, Judge; and Campbell, Chief Justice,. concur.

Graham, Judge, took no part in the decision of this case.  