Business owners struggling to pay so-called 'dance tax'

Business owners struggling to pay so-called 'dance tax' »Play Video
SEATTLE -- It takes two to tango, but it will take a majority of state lawmakers to get rid of what some call an archaic law that could force nightclubs all over the state to close.

Nightclubs, concert halls and even dance studios are feeling the heat. A handful of businesses across the city say they were slapped with six-figure bills, all because they should be charging extra to dance.

The owner of the Century Ballroom on Capitol Hill is trying to figure out how she's going to tango with the state.

"Dancing should not be something that's taxable," said owner Hallie Kuperman.

Kuperman is talking about the so-called "dance tax," a decades-old state law that says if a business charges for the "opportunity to dance," it needs to be collecting taxes.

Kuperman said she got a $250,000 bill from the state, which she said she can't afford.

"Of course we're responsible for our taxes, but nobody knew this tax existed," she said.

State officials see it otherwise and say the law has been on government websites since 1995.

"It kind of surprises me that people can say, 'We didn't know, nobody told us.' It's right there for everybody to see," said Mike Gowrylow of the state Department of Revenue.

The law has existed for decades, but that doesn't mean everyone understands it. Many people aren't even sure what kind of dancing is taxable. Other ask why not tax outdoor concerts such as Bumbershoot the same way you tax nightclubs?

"The reason you primarily go to a concert is to watch the concert," Gowrylow said. "The fact that somebody might get up and dance is not the main reason you're there."

Kuperman still owes the state about $90,000, but she's working with lawyers to see if she can somehow work out a compromise with the state.

State Sen. Ed Murray is sponsoring a bill that would life the tax entirely. He's trying to get a hearing on the issue as early as next week. In the meantime, the Century Ballroom is hosting a fundraiser next Saturday to make up the tens of thousands of dollars it still owes.