Superbowl and Sales Tax Woes
The St. Louis Rams may not be contenders for the Super Bowl, but they are in a long battle with the Missouri Department of Revenue over a few sales tax problems and fans aren’t happy. The Rams are claiming that they collected 40 cents too much in sales tax on tickets, totaling $400,000 in overages. They’ve filed with Missouri for a refund of that overage, and they want some other taxes to be forgiven. Missouri, however, is looking to collect a huge amount of money from the Rams for unpaid taxes on luxury club memberships, totaling around $1.4 million. It’s a sales tax mess.
On top of it all, if the Rams were refunded the overage, there is no way for them to get that back to their customers. When an overage is returned to a business, it’s normally their obligation to return the amount to customers. Since tickets can trade hands multiple times, tracking down the final consumer who paid the sales tax is difficult to do. Add in resales of tickets where prices are increased or decreased and things get very complex—do you refund part of the sales tax to one person and another part to another? Fans aren’t happy that the Rams will pocket all of the sales tax refunded by the state and are asking for other alternatives, like improvements to the stadium or community service. You might think that something as simple as the sales tax price on every ticket in the venue would be easy to calculate.
The Rams’ sales tax staff may not be able to stay on top of all the complex sales tax matters they oversee for team activities, and they may not even have been involved in those calculations. Many businesses face the same kinds of problems, even if they don’t have to deal with the kind of publicity the Rams are facing. Whether you use automated sales tax calculations in your point-of-sale system or you still do it by hand, filing should be a point where you double-check and catch mistakes before sending it all into the state. If the Rams had used our sales tax filing software, they could have discovered the issue in sales tax on tickets well before and handled the issue internally.