AMERICAN MULTI-CINEMA, INC., as successor-in-interest to AMC Showplace Theatres, Inc., d/b/a Arapahoe Crossing 16 and Southland Stadium 16, Plaintiff-Appellant,
CITY OF AURORA, Defendant-Appellee.
County District Court No. 14CV30822 Honorable Kurt A. Horton,
[Copyrighted Material Omitted]
Holland & Hart LLP, Christina F. Gomez, Jonathan S.
Bender, Kyriaki Council, Denver, Colorado, for
& Fellman, P.C., Paul D. Godec, Denver, Colorado; Timothy
Joyce, Assistant City Attorney, Aurora, Colorado, for
Cave Leighton Paisner LLP, Stephen D. Rynerson, Denver,
Colorado; Jacqueline E. Brenneman, North Hollywood,
California, for Amicus Curiae National Association of Theatre
Michael J. Axelrad, Senior Assistant City Attorney, Greeley,
Colorado, for Amicus Curiae Colorado Municipal League, City
of Fort Collins, City of Littleton, City of Longmont, City of
Montrose, and City of Westminster.
J. Weiser, Attorney General, Noah C. Patterson, Assistant
Solicitor General, Anne Mangiardi, Assistant Attorney
General, Annie Lawson, Assistant Attorney General, Denver,
Colorado, for Amicus Curiae Colorado Department of Revenue.
1 Plaintiff, American Multi-Cinema, Inc. (AMC), appeals the
district court's judgment finding that defendant, City of
Aurora, properly levied a use tax on AMC's master
licensing agreements (MLAs) with motion picture distributors.
2 AMC generates revenue by exhibiting motion pictures and
selling admission tickets to the public. AMC's MLAs
authorize it to exhibit motion pictures for a licensing fee,
and AMC then pays distributors a percentage of its admission
sales. AMC has paid the City a use tax — levied on
tangible property used, stored, distributed, or consumed in
the City — on its MLA fees since it began operation.
AMC previously received motion pictures from distributors in
the form of 35-millimeter film reels but later replaced the
celluloid film technology with digital equipment and now
receives motion pictures via digital files on portable hard
3 On November 1, 2012, AMC filed two refund claims with the
City, seeking a $191,634.06 refund from use taxes paid on
licensing fees from May 27, 2010, through September 27, 2012.
During this timeframe, AMC used digital files to exhibit
motion pictures at its two Aurora theatres. Arguing that the
digital files were not tangible personal property in the
district court — on appeal, AMC no longer disputes
that the digital files are tangible personal property
— AMC claimed that its MLA fees could no longer be
subjected to the City's use tax. The City denied
AMC's refund claims in full, and AMC appealed to the
City's Finance Director, who also rejected AMC's
4 On March 26, 2014, AMC appealed to the district court.
After a bench trial, the district court upheld the City's
use tax, finding that (1) the data files were tangible
personal property under the City's code; (2) the true
object of the MLAs was to acquire the data files rather than
to obtain the intangible right to exhibit; and (3) the MLAs
were not exempt from the use tax as a purchase for resale.