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Seattle clubs owe thousands for neglecting dance tax

Several Seattle nightclubs have complained that they were visited by state auditors who say they owe thousands in back taxes for giving patrons an "opportunity to dance." The Department of Revenue, however, says the sales tax is nothing new.

"This is just something that's come up in Seattle suddenly, it's not been an issue anywhere else in the state," Mike Gowrylow with the Department of Revenue said of the complaints. "Most business are paying it, but there are a couple big ones that apparently got caught essentially and think it's unfair and didn't know."

The 9.5 percent sales tax has been around since before 1990 and applies to establishments that charge a cover fee to admit patrons who will "have the opportunity to dance" while inside.

"It's a purchase by the customer for the opportunity to dance," Gowrylow said. "It's like going down and buying a stereo at the store, in that sense, but you're buying a service as opposed to a product."

The law can be applied to taverns, music venues and karaoke bars.

The Stranger reported that nightclub owners in Ballard, Fremont and Capitol Hill were confused by the law's language and are asking the state to forgive their debts. One establishment was reportedly told they owe $210,000 in back taxes.

Gowrylow said those who feel they shouldn't owe the taxes can appeal.

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About the Author


Brandi Kruse is a reporter for KIRO Radio who is as spontaneous and adventurous in her free time as she is on the job. Brandi arrived at KIRO Radio in March 2011 and has already collected three regional Edward R. Murrow awards for her reporting.

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