Taxation of ticket sales has been on the forefront with Branson leaders for years. Under a past administration, former Branson City Manager Terry Dody, attempted to collect city tourism levies on retail sales.
Until the Supreme Court ruling last year, Branson theaters paid tourism taxes in a Value Added Tax (VAT) method. Taxes for Branson venues were paid on wholesale prices which meant the city of Branson loses millions on the retail sale of tickets. The loophole has led many Branson companies to create corporations in Hollister creating a loophole where Branson theater and hotel owners to escape levies.
One real world example allows a business to setup shop 100 yards from city limits, sale tickets to a company under a corporate umbrella and reduce hotel and theater booking taxws 50%.
Supply, demand and actual cost of tickets eludes many tourists to our friendly city, so here's the rundown.
Most theaters offer wholesale tickets to vendors. Under contract, a theater ticket with a list price of $50.00 could be sold for $5.00 a ticket wholesale. Theaters have been collecting on the $5.00 ticket price and absorbing the tax on the wholesale amount. These tickets are often given away in exhange for timeshare tours or repackaged and sold embedded with Hotel and dining vouchers. Hybrids of the two aforementioned models are common as well and were addressed in the Missouri Supreme Court Decision viewable from the link posted above.
A political and lobbying organization, known as the League of Theaters, now subsidized through public funds, initiated a lawsuit claiming theaters shouldn't have to collect the tax due to the fact the tickets are being wholesaled. One of the initiators of the suit was Branson's Mayor. Before seated as Mayor,the Presley Theater dripped the suit but Music City Center pushed forward. Missouri's Supreme Court agreed with Music City Center and in their opinion addressed retail sales tax collection methods.
For Presley and friends the fruits of victory were sour. Six months afer the ruling, A meeting with Missouri's Department of Revenue enraged travel agencies. The ruling also backfired on the Theaters themselves as the Department of Reveune promised to audit theaters to chase down state taxes on retail sales.
The debacle forced three tax collecting entities to cough up tax dollars to fight the mess our city leaders private legal endeavors forced upon companies selling travel services.
Businesses in the area are being told to disregard Missouri's Supreme court decision and are pushing several measures to put a bill on Missouri's Assembly floor. Section two of House Bill 2040 reads:
" Because immediate action is necessary to prevent the imposition of sales and use taxes on items that are intended to be exempted or excluded from sales and use taxes, section A of this act is deemed necessary for the immediate preservation of the public health, welfare, peace, and safety, and is hereby declared to be an emergency act within the meaning of the constitution, and section A of this act shall be in full force and effect upon its passage and approval.;"(Full House Bill 2040 Text as Introduced)