“Music City Game” can cost the loss of tens of millions in revenues to Branson and Missouri?

An August opinion of the Missouri Supreme Court (Court), “Music City Management, LLC v Director of Revenue” (Music City), changes the way that retail sales taxes on show tickets are collected and paid and authorized huge refunds of taxes already paid back to the plaintiff theatres. In doing so it created a situation that can potentially cost the city of Branson and the state of Missouri tens of millions of dollars in lost revenues and cost the taxpayers of Branson hundreds of thousands of dollars.

Prior to the Music City case, if theatre “TA” sold a Ticket Reseller a ticket that retailed for $40.00 for the wholesale (FIT) rate of $30.00 and the retail sales tax rate on the ticket, including city of Branson, state, ambulance districts, etc, was 10 percent, TA would have collected and remitted $3.00 in retail sales taxes to the Missouri Department of Revenue (MDOR). When the Ticket Reseller sold the ticket at retail to a customer for the full $40.00 they would collect and remit to MDOR an additional $1.00 in retail sales taxes, for a total tax collected and remitted of $4.00. At its simplest level, after the Music City case, the Ticket Resellers is responsible for collecting and remitting the total sales tax due, in this case $4.00.

In implementing the Courts decision MDOR has said that every Ticket Reseller must register for Missouri sales tax for each place of amusement, entertainment or recreation and collect and remit the tax based on the tax rate applicable to the place “for which the admission is sold.” The registration appears important because the “Sales/Use Exemption Tax Certificate (Form 149)” that must be presented to the theatre at the time the Ticket Reseller Purchases tickets for resale by Missouri businesses is required to have the Missouri Tax ID Number. One can only wonder how many Ticket Resellers have applied to register with the state, just how long such registration takes and if there is a public list of Ticket Resellers who have registered.

The Ole Seagull finds the Courts authorization for a refund particularly onerous. The theatres in the Music City case appear to getting a refund of money that was paid by the Resellers that bought the tickets from them. Too, an Ole Seagull believes there is a strong likely hood that the State of Missouri will go against the City of Branson and the other taxing entities for a refund of the taxes the state paid to them and is having to refund to the Music City plaintiffs. What a strain that could put on already stretched budgets.

Why is some sort of class action not being taken to have the “Music City” money held in escrow until it can be determined who actually paid how much for what? Once it’s given back to the “Music City” plaintiffs and their attorney(s), for all practical purposes, it is gone absent legal action by each entity against each theatre getting a “Music City” refund. One can only wonder about the possibility that the ramifications of this decision could cost the city of Branson, and for that matter, the state of Missouri,millions of dollars in lost revenues from tour companies and others that might choose to go somewhere else rather than play the “Music City Game?

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