New Tax Rule Threatens Seattle Ballroom

FREEDOMWORKS

Hallie Kuperman loves to dance. But what she loves even more is sharing this passion with visitors to her social dancing club, the Century Ballroom.

Hallie purchased the vintage dancing space 16 years ago, turning it into a Seattle institution. The Century Ballroom not only teaches swing, tango and the foxtrot, it also hosts cabarets and other live performances for an eclectic crowd of all ages. The club’s trendsetting owner has become a prominent and beloved figure in the community.

Business was swinging until a surprise bill arrived from Washington’s Department of Revenue. The state agency decided to reinterpret an obscure old tax, audited the Century Ballroom, and demanded a check for $92,000. 

Obviously Hallie doesn’t have that kind of cash lying around, so she now faces the possibility of closure. "I am angry that we are even in this position," she said. To try to keep the doors open, the ballroom is holding a fundraiser this weekend. Here’s how she explains her frustrating predicament:

[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...

[W]hen 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.

Not content to simply pay her bill, Hallie is joining other dance facility owners to put an end to the tax. Washington Senate Bill 5613 would remove “opportunity to dance” as a tax liability — if it passes both houses and is signed into law. To promote the effort, she’s even organizing a “dance in” at the state capital.

“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,” Hallie said. “Instead, they just audit us, and want us to pay $92,000.”

Here’s hoping that the Century Ballroom can sweep the taxman off the dance floor for good.