Dance studio owner says entertainment tax is unfair

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KANSAS CITY, Mo. -- A debatable classification is costing Missouri businesses thousands in taxes, and one dance studio owner in the metro is speaking out.

Dianna Pfaff said she’s teaching dance steps as well as character traits to last a lifetime. That's one of many reasons the owners of Miss Dianna's School of Dance on North Oak Trafficway are saying a recent ruling by the Missouri Supreme Court threatens to hurt her business.

The Missouri Department of Revenue said schools of dance are places of entertainment and amusement -- not education -- as the state Supreme Court on Jan. 12 ruled.

Pfaff has owned this school for 41 years. She said her business has passed audits conducted by the state, and this is the state's only way to collect extra money from her.

“It isn't in place anywhere else in America,” Pfaff told FOX 4 News on Wednesday.

The entertainment tax, which she’s been fighting for the past four years, costs her an extra eight percent of each transaction.

“I have spoken to teachers from all over the country, and they just laugh. They don't understand how they could possibly do this, but they have,” Pfaff said.

When Pfaff's costs went up, she said she had to pass them along to her customers.

Kathleen Johnston has two kids who have attended classes here. She's seen her tuition costs rise, and she said it's happened for no good reason.

“I don't understand how they can take an educational institution and decide that it's entertainment to them. They made a decision and it doesn't make any sense,” Johnston said.

One teacher at the school told FOX 4 News she fears this opens other businesses to the entertainment tax, including music schools and sports programs.

FOX 4 News asked the Missouri Department of Revenue for a comment on this new tax. Their spokesperson referred to the court documents, and refused to comment further.

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