club dance
The opportunity to dance tax is part of a decades-old tax law covering amusement, recreation and other entertainment. (AP Photo/File)

Obscure tax could force Capitol Hill club to close its doors

BY Chris Sullivan  on February 19, 2013 @ 6:23 am (Updated: 10:28 am - 2/19/13 )

Capitol Hill's Century Ballroom might have to close its doors if it can't come up with more than $90,000 in back taxes after the state found out it hadn't been collecting the obscure "opportunity to dance" tax.

Bars and clubs that collect a cover charge and have a dance floor or even a strip of carpet where you can dance are supposed to collect a 9 1/2 cent sales tax. Whether people dance or not, the clubs that provide a place where people could dance are supposed to pay the state a portion of that cover.

It's part of a decades-old tax law covering amusement, recreation and other entertainment.

Hallie Kuperman has owned the Century Ballroom for 16 years. She had never heard of the tax until the state audited her club two years ago and determined she owned nearly $250,000 in back taxes.

"You shouldn't be taxed for dancing for a lot of reasons," said Kuperman. "If you were going to tax dancing, why did you not tell me in the last 16 years that maybe I should be paying this tax?"

Mike Gowrylow is with the Department of Revenue. He said it's not up to the state to tell people to investigate the tax code when they open a business.

"If you choose to do business in our state, it's your obligation to learn, understand and comply with our tax laws," he said. "All this information is readily available. If you have any questions on whether taxes are due or not, you can call us."

Kuperman claimed that's what she did when she opened the ballroom, and the state never mentioned this tax. Other businesses hit for back taxes by the state have said the same thing.

"It's just unfair to say that as a group we chose not to pay the tax," Kuperman said. "That's just so not it."

Kuperman appealed the ruling and has been working with the state to get the tax bill cut down, and both sides have agreed on $92,000. She must come up with the cash in three months, or she'll likely have to close.

Gowrylow said the state doesn't want businesses to go out of business, but everyone has to pay their taxes.

"We just can't look the other way and say 'Gee it's too bad you didn't comply, do it going forward and everything will be fine,'" he said.

The Century Ballroom is holding a fundraiser Saturday night during its 16 year anniversary party to raise money to pay its back tax bill. So far it's raised about $7,000.

State Senator Ed Murray has sponsored a bill for the last two sessions that would eliminate the opportunity to dance tax. It didn't get a hearing last session.

It will have a hearing on Thursday.

Chris Sullivan, KIRO Radio Reporter
Chris loves the rush of covering breaking news and works hard to try to make sense of it all while telling stories about real people in extraordinary circumstances.
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Comments (11)


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  • ratrustle wrote...
    Ignorance of the law is no excuse?
    February 19, 2013 7:01 am
    How about some common sense? Mike Gowrylow with the Department of Revenue is a typical reason most small business owners are fed up with this State's tax system. How in the world could anyone with ANY common sense have expected that they would be taxed on dancing? The State ought to be the one looking for solutions here, not the business owner! Truly Absurd!
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • shark75 wrote...
    Mike Gowrylow sounds like a first class dou.che bag
    February 19, 2013 7:02 am
    From the sounds of the phone interview. Yeah yeah so he's just "doing his job". I'm sure he takes pride in it...
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Bremerton Voice wrote...
    Ignorance
    February 19, 2013 7:04 am
    is not an excuse. You want to run a business you better know all of the taxes involved. I for one am happy that my cover charge has taxes that the owner has to pay out of, I think paying a cover in the first place is ridiculous.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • WAmovesRight wrote...
    What you don't realize is....
    February 19, 2013 8:37 am
    ... YOU will be the one to pay that tax when they increase the amount to "cover" the tax.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • eROCK wrote...
    Everyone has to pay their taxes....unless you're super rich!
    February 19, 2013 8:25 am
    Facebook is getting a tax refund this year of over $400 million and will not pay a cent in taxes for 2012! So, no, not everyone has to pay taxes. Just more proof that our tax system is a joke!!
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • CldWtrSrf wrote...
    Don't forget
    February 19, 2013 12:44 pm
    G.E. and Obama's "Job Czar" Jeffery Immelt. They pay ZERO in taxes on BILLIONS in profits. They actually get money back, then take that money and build plants overseas to ship jobs to. Pretty cool huh? Tax payers PAYING to offshore jobs, just like General Motors. But according to the parrots on the Left it's only Mittens Romney that ships jobs overseas. Oh, don't forget about "Turbo" Timmy "Tax Cheat" Geitner....he HATES paying his taxes too.
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  • WAmovesRight wrote...
    This is one more reason...
    February 19, 2013 8:43 am
    ... for a simpler better tax code.

    It's not rocket science but the problem is that a simple uniifed tax code would put a lot of people out of business... not just the IRS (and the state equivalents). Auditers, accountants, tax return preparers, lawyers, etc.

    A complicated tax code is a way to create a market place for these services. Plus, it offers the government a broad spectrum of movement when putting the squeeze on business' and individuals when they need $$$.

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Swan wrote...
    Taxes
    February 19, 2013 10:39 am
    Let try to find more ways to put people out of work with laws that no one can keep track of. A flat rate tax on everything might be better and sure would be simpler.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • bigdogina4x4 wrote...
    Look, it's just another ridiculous tax in Washington
    February 19, 2013 11:25 am
    This state does everything possible to hamper and run businesses out of town. Someday the poeple of Washington will figure it out and replace the liberal Governers and state legislature with more conservative people.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Swan wrote...
    Driving jobs out of the country
    February 19, 2013 12:44 pm
    All the overhead cost bring up the cost of goods produced and have to be added to the cost of business is always added to price of the goods. When made in China goods have low overhead the sales goes to them even if our product is better made. Every leach that is non producing is overhead that has to be paid for by the public and if not the business goes under.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • kato1967 wrote...
    Mike Gowrylow is with the Department of Revenue
    February 19, 2013 12:50 pm
    and is a prime example of a bureaucratic idiot. I think I have identified at least one area the State can cut it's budget and make the world a better place.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
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