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Clubs upset over ‘Dance Tax’

A 9.5 percent ‘Dance Tax’ on ticket sales for various King County venues has owners crying foul.

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ballroomSEATTLE — A bill proposed in Olympia is trying, once again, to confirm that age old axiom:

You can dance if you want to. You can leave your friends behind.

Senate Bill 5612 would end the 9.5 percent ticket sales tax currently waged on King County clubs that have a cover charge and “offer the opportunity to dance.” The bill is scheduled for a hearing Thursday, Feb. 21.

The so-called ‘Dance Tax’ is charged in addition to business and occupation taxes. The tax has has been in place since the 1980′s, but only recently been collected, many club owners say.

Hallie Kuperman, the owner of Century Ballroom, said the $92,000 she owes in back  Dance Taxes are ridiculous, and that her venue should be charged no different than any other business.

“Charging people for the opportunity to dance as an activity, it’s insane ” Kuperman said.

Century Ballroom is hosting a fundraiser birthday party, Century’s Sweet 16, in an effort to help pay off some of the cost. The cover-fee is $8 for for the event on Saturday, Feb. 23 that will include dancing, DJs, performances and champagne tasting.

Neumos Crystal Ball Reading Room also released a statement saying the Dance Tax wasn’t applied in previous years. Now, venues and clubs are “facing severe financial setbacks based on the reconciliation.” The tax has been arbitrarily levied on some clubs, while not on others, Neumos officials said.

Ticket prices will need to go up if the tax is allowed to continue.

“If the Dance Tax goes into effect, Ticket prices will be forced to increase 10 percent,” a Neumos statement read.

ballroomSEATTLE — Seattle’s Century Ballroom is one of a handful of King County dance clubs that owe back taxes to the state because they have a cover charge and give customers “the opportunity to dance.”

Doesn’t sound like a big deal, but Century’s owner got hit with a quarter-million dollar tax bill after an audit.

“Charging people for the opportunity to dance as an activity, it’s insane,” said Hallie Kuperman, owner of the Century Ballroom.

The state Department of Revenue points out the cover charge rule has been on the books for decades and there is nothing confusing about it.

“The fact is you need to understand what taxes apply to your business,” department spokesman Mike Gowrylow said. “If you’re not sure, you need to ask us. Just saying ignorance is an excuse doesn’t really fly.”

Kuperman said, “They can say it’s been on the books, but nobody had been informed. None of the nightclubs in the state of Washington got a letter.”

Kuperman, who has owned the ballroom for 15 years, said it’s unfair because similar businesses are exempt.

For example, strip clubs and live concert venues don’t have to collect the 9.5 percent tax on cover charges. The state Department of Revenue said that’s because those places are more about watching than dancing.

“The whole concept of taxing dance, I think, is a bit odd,” said state Sen. Ed Murray, D-Seattle, who is sponsoring a bill in Olympia that would lift the tax.

“Our nightlife business, which is a vibrant part of our business community, gets unfairly hit by this tax,” Murray said.

But even if Murray’s bill is approved this year, Kuperman is still stuck. The good news is she’s managed to negotiate her $250,000 tax bill down to about $90,000.

Now she’s hosting fundraisers — with no cover charge — to keep Century Ballroom open.

The Department of Revenue said that for years, most dance venues in Washington have been in compliance with the ‘opportunity to dance’ tax. Forty-four businesses were audited a couple of years ago and of the 44, only about eight were in violation of the law.

The state said it willing to work out payment systems with those dance venues.