February 15, 2013 Print
    

Taxing the dance away...

The “opportunity to dance” just became more expensive.  It isn’t clear why the Washington State Department of Revenue decided to “reinterpret” the definition of “opportunity to dance,” but the result will cost dancers in Seattle.  This decision to “reinterpret” this phrase is clearly aimed at plundering more tax dollars from a specific type of business – dance clubs, ballrooms, and other businesses where people might have an “opportunity to dance.”  In a climate where raising taxes is not popular – even when you euphemistically call it “raising revenue,” what can you do to get more money from the public?  Passing a tax increase by 2/3 is not certain – even in Olympia.  The Washington State legislature has already increased a lot of “fees” (aka – taxes for specific uses called “fees”) in the last legislative session.  What else can you do?  The Department of Revenue has the answer – just change the definition and interpretation of previous legislation.  No need to go back to the messy legislature, and it is easier to avoid public scrutiny.  Of course, sometimes, when the political pressure (aka political donations) is high enough – the Department of Revenue will reward political friends as reported here.  However, it is more frequent that the reinterpretation process punishes existing business with surprise taxes.  The Department of Revenue did this recently by redefining “opportunity to dance” as a tax liability, and sticking this new reinterpretation to various dance clubs and ballrooms in Seattle.

The Century Ballroom in Seattle has been holding fundraisers to attempt to cover this new, surprise cost of doing business in Washington.  They write about their experiences and this new tax reinterpretation here.  They are not alone, and the concern for these businesses in Seattle is not only the fact this is a new interpretation of the law, but it isn’t applied uniformly or consistently for every affected business. 

As Hallie Kuperman, owner of the Century Ballroom stated earlier today “They (Department of Revenue) don’t stand by their word, and they change their mind on how they define “opportunity to dance.”  She continued, “If at any time during the last 16 years, they had told us we were missing this tax, we could have planned ahead and at least determined if we could afford increasing our prices to reflect this new tax.  Instead, they (Dept of Revenue) just audits us, and wants us to pay $92,000 (negotiated down from the original late fees and effort to collect $250,000.” 

Mark Twain Quote on TaxesThe Department of Revenue appears to be having a difficult time defining “opportunity to dance,” and their recent attempts at reinterpreting this language to raise additional tax dollars is confronting reality poorly and inconsistently.  Some dance clubs appear to be able to make their own call and are allowed to define each event whether it is subject to this new tax.  Other venues are required to pay the new tax at every “opportunity to dance” event.  Some clubs are simply overlooked and are conducting business as usual – oblivious to the tax policy decisions being made in the back rooms of Olympia.  Hallie explained, “…it is so confusing to businesses.”

As anyone who has ever confronted Washington’s Department of Revenue already knows, confusion abounds and it is hard to get a straight answer.  We were not able to reach a Department of Revenue employee who understood this issue before we printed this article (it is Friday), but we are eager to hear their current stance on this tax confusion.  We are also eager to hear how they are attempting to define “opportunity to dance.”  As always, the government bureaucracy finds interesting ways to involve themselves in our lives.

There is a possible fix for the tax confusion in Senate Bill 5613,  and the Century Ballroom is encouraging supporters to contact their legislators on this bill.  Appropriately, they are also organizing a “dance in” at the state capital – date to be determined.  This might make history as the first dance-in at the State Capital in protest of tax policy, and will certainly merit putting on your dance shoes for a unique event. 

We can all be thankful that the Washington State Capital in Olympia is not a National Monument, otherwise the dancers could be taxed and arrested as our own Dave Roland explains here, and as this video shows people being arrested in DC here.  We always advocate more activism and civic engagement by citizens, and the dancers who come to protest the Department of Revenue’s attempt to increase their costs can probably expect to do so without fear of arrest.  However, while dancing in protest at our state capital is unlikely to result in arrest, if the Department of Revenue has its way – if you have the opportunity to dance – you will pay.

Author

Glen Morgan

Property Rights Director

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