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Nailed by the dance tax, Century Ballroom throwing party to help pay $90,000 penalty

Capitol Hill’s Century Ballroom says it must raise $90,000 within three months to cover a penalty in fallout from the wave of “opportunity to dance” tax audits that have hit area clubs.

The announcement comes as part of a fundraiser event planned for next weekend:

Two years ago Washington’s Department of Revenue reinterpreted an obscure tax and, without notice, started applying it to businesses such as ours. This has become known as the “opportunity to dance” tax.

The details of this tax are set forth below if you’re interested. The short version of the story is that the State started to enforce this tax by selectively auditing several local nightclubs and one dance hall, the Century Ballroom. We are now faced with a penalty of $90,000, due in three months . With the threat of this looming for almost two years, we have been altering our programming and adjusting prices while negotiating with the State. Unfortunately, our efforts have fallen far short of raising the required funds.

Our patrons are loyal and generous, and we are truly blessed. We are asking for financial gifts because we have heard from many people who, after hearing our story, would like to help. We are grateful for your continued presence at our dances and classes. It is the best show of support we could ask.

If you would like to consider giving an additional gift at the anniversary party, it would be greatly appreciated. We would not ask our patrons to do even more if the situation weren’t so dire.

The page has links for making a donation in addition to information about next weekend’s Sweet 16 fundraiser.

In 2012, as Century celebrated its 15th anniversary, CHS talked with owner Hallie Kuperman about her dance-focused business.

It was also in February 2012 when we reported that Neighbours faced ongoing issues related to the dance tax.

While Century will be on the hook for the penalty, there is hope for change on the horizon. Ed Murray is among the sponsors for SB 5613 that would change the language used in the tax to help clubs and venues like Century.

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18 thoughts on “Nailed by the dance tax, Century Ballroom throwing party to help pay $90,000 penalty

  1. You’re a for profit company, pay your damn taxes or go out of business. No sympathy here. Why are so many people who are so bad at running businesses so quick to blame others for their malfeasance.

    I hope you remember to pay sales tax on these “donations.”

  2. If they’re asking for donations towards a specific goal, the least they could do is
    a) say how much they were able to raise, in the two years where they were planning for this, and therefore exactly how much they need now. Did they raise $3,000 and still need $87,000, or did they put together $56,000 and are trying to get another $34,000?
    b) some tracking mechanism showing how much they raise as they go and close the drive when they hit $90,000
    or c) worst case, if they’re unable to manage the fundraising properly with the two options above, a guarantee that donations above $90,000 will go towards something specific, not just operating expenses.

  3. Jesus Marie, Seriously, you didn’t read the article and you have no idea what you are talking about. This is a tax that NO club owners knew about for years, and now they are being asked to come up with insane amounts of money to make up for something that was never being enforced. The city is trying to pay their own bills on the backs of honest business owners, with no regard to the huge cultural, financial and personal loss to the people who make this town worth living in. So shut up, since you don’t give a damn.

  4. That’s actually not true. They knew about the tax, it’s not a new tax. Perhaps they got some bad advice on whether they were subject to the tax or now, who knows. The fact is that ignorance of the law is not a defense for breaking the law. No sympathy here. Maybe they can sue their CPA for malpractice. Either way, they owe, so pay up, like a responsible citizen.

  5. Seriously, you should go to their website and see the facts of their story. They describe the course of events in much more detail than above and mention that there is legislative action to clarify the law so that it is not interpreted so vaguely by the DOR. Here’s the website that includes the detailed description:

    But in case you just quickly glance at my post and don’t read all the facts like a “responsible citizen” here’s the gist addressing your specific criticisms:
    1. Department of Revenue (DOR) reinterpreted a law that was applied to aerobic studios and applied it to places like clubs and this dance hall. They did not communicate this change except changing a line on their website and then began to audit high profile locations like Century Ballroom, Tractor Tavern and Neighbors.
    2. Century Ballroom’s book keeper called the DOR and they verbally agreed that Century Ballroom was paying everything they needed to. But DOR will not hold themselves to the verbal agreement.
    3. The original assessment of what Century Ballroom owed was $250K (Tractor Tavern was hit with a similar amount) but it has been reduced to $92K

  6. On the Century Ballroom website they mention that the original penalty was $250K and that it has since been reduced to $92K. This would explain why “fundraising” wasn’t done in earnest right away since they were fighting the situation. They simply say they have been raising prices and adjusting their programs to meet the need for extra revenue.

    • Right on! the Truth kills these folks…..KARMA is never BLIND….’what kinda cheese would they all like with their whine?.’..whine…whine….

  7. That sounds like a ridiculous law, in addition to how it was handled. You really want to tax people moving around now? You want to tax people burning calories? You wan to discourage people from actually moving their butts in a society where most of us six 8 hours a day, drive 2 hours a day and hardly walk? You want to tax people having a good time, in a safe activity? That’s just great–totally smart and worth while. Government at its best.

  8. Century did a pretty good job of putting the background of their situation on their website. The exact same money grab has hit The Cuff and Neighbours. I tried to find out more information on my own when this stuff all hit the fan to begin with and it appeared at that time the State was trying to get a 9.5% tax on each establishment’s cover charge in addition to the B&O tax they get on drink sales. Pick a bar with a lot of tweakers and you aren’t selling many drinks, but you are pulling a lot of income by way of cover charges.

    If anybody has inside info from Dept of Revenue on whether or not my scenario is true, that might help somebody else facing the same situation. The way some of the local “news” media stories were written a year or so ago, it appeared these establishments weren’t paying anything in the way B&O taxes on the cover charge they were levying against everybody who came in.

  9. Perhaps what this all points to is an overall need to reform Washington’s extremely regressive tax system that puts the burden on small businesses and the poor disproportionately versus the amount of taxes paid by the wealthy. This is why we should have passed the income tax a few years ago.

  10. If you go to Century’s web page about the fundraiser, you will see that the “advice” they got was FROM THE DOR. I’ve experienced this when dealing with government departments, where my building was very proactive about determining costs associated with a project, was told one thing by government employees, and then months later hit with a requirement that we had previously been told did not apply to us, which added tens of thousands of dollars to the project. We even had the first determination in writing, and it meant nothing. So it’s very believable that businesses had every reason to think they were in tax compliance prior to the DOR’s crackdown.

    The state and city have been so strapped for cash in the last few years and have been looking for any and ways to increase their cash stream, including looking at arcane, unenforced taxes and seeing where they can be applied that they previously haven’t been. I don’t totally disagree with that strategy – governments should be collecting what they are due – but to go after years of BACK taxes from businesses that thought they were in compliance seems short sighted. If those businesses fail as a result, there goes the revenue stream.

    Century Ballroom and Hallie Kuperman have been tremendous supporters of the Capitol Hill community for years. The loss if Century were to close would be tremendous. Good for Hallie for getting creative about ways to stay in business, and good luck to her.

  11. Heh, Neighbour’s u can run but can’t hide…..owners never paid Cdn taxes at Neighbour’s Club in Vancouver and bolted to Seattle… they’re screaming ‘UNFAIR’…. Karma will find you no matter what rock you hide under…..Cairo, Hawaii, Seattle……its payback time…..blame, blame NO ONE but yrselves!!