Two years ago Washington’s Department of Revenue reinterpreted an obscure tax and, without notice, started applying it to businesses such as ours. This has become known as the “opportunity to dance” tax.
"What Can I Do?"
We need you and friends across the state to contact Representative Reuven Carlyle at email@example.com and remind him why the law needs to change now.
You may copy these talking points or write something from your perspective—As always please be considerate, we want all legislators to hear us and to be our allies.
The DoR has been unable to define what it means to provide "the opportunity to dance" or enforce it consistently and uniformly statewide to all establishments that provide this opportunity.
The the law needs to change now, before it is too late for small businesses. It isn't being uniformly enforced statewide and that puts the businesses that are paying the tax at a disadvantage when places like the Gorge, Chateau St. Michelle, Bumbershoot, ZooTunes, Puyallup Fair are not having to pay the tax.
In a nutshell, a few years ago the Department of Revenue identified a tax that had been implemented for aerobic studios and jazzercise and applied it to clubs. They quietly added language to the taverns section of their website, but did not send out a communication to the business sector notifying us of the change, as is customary. The Department then started targeting high profile clubs and assessing penalties far beyond what any are able to pay. In Century Ballroom’s case it was around $250,000. The Tractor Tavern’s assessment was similar. While the DOR has reduced the assessments, they still are high enough that our business’ future is unclear. Our final bill from the state amounts to approximately $92,000.
It should be noted that when our current bookkeeper started about ten years ago, she contacted the Department by phone, reviewed with them all the various things we do and was assured we were paying everything appropriately, but the Department refuses to stand behind information they provide verbally.
The “Opportunity to Dance” is not in any law. It is only the DoR’s interpretation of the law in the Department’s rules. It is also impossible to clearly define what dance is, let alone what the opportunity to do so is. The DoR itself has acknowledged this. Because there is no reason to believe the Department will change its rules on its own, we are seeking to amend the law to clarify its intention and remove “opportunity to dance” as a tax liability (Senate Bill 5613). Currently this effort has the support of Senator Ed Murray, Washington State Arts Alliance, Washington Restaurant Association, The Recording Academy, AEG, Seattle Theater Group, Local 76 Musician’s Association and local venue owners from around the state.
Setting aside that this is a sin tax on an activity that is wholesome and promotes community and healthfulness, the impact on businesses statewide, if not addressed, will have a chilling effect on our vibrant nightlife economy.
Fiscal estimates have been created indicating that the effect of the tax is around $800K/biennium. We suspect it is actually lower than this but even at this amount the loss is negligible compared to what will happen if clubs are forced out of business either through onerous audits or decreased business as all cover charges are raised 10% to cover the tax.
Thank you! Hallie Kuperman, Owner Century Ballroom The Tin Table
If you have any additional questions or want to find out more about our progress with the Department, please contact Hallie directly at Office@CenturyBallroom.com or by phone Monday through Friday at (206) 324-7263.