IIma Loyal was on her way back to Columbia from a trip to Tunica, Ms. As she drove north out of Tunica she decided that she would make an impromptu stop at one of her favorite getaway locations for the night, Branson, to relax and see a show. Having been to Branson a number of times before, she made her lodging and show reservation directly with the motel and show and did not use a “reseller,” such as a ticket agency.
Her room rate was $100 and her show ticket was $25. The total $125 is subject to, among other taxes, the four percent Branson Tourism Tax. Ima paid $5 in Branson Tourism Tax.
On exactly the same day, Ira Resister, a salesman was driving south out of Springfield on highway 65, saw a barrage of billboards that reminded him of the great Branson ads he had seen on cable TV the night before and decided that he would spend the night in Branson and see a show. Not having been to Branson before he went into the store of one of the many “resellers” authorized by the various shows and lodging establishments in Branson to resell their tickets and lodgings.
Ira ended up staying in exactly the same hotel and going to exactly the same show as Ima did. His room rate was $100 and his show ticket was $25. The total $125 is subject to, among other taxes, the four percent Branson Tourism Tax. Ira paid $4.25 in Branson Tourism Tax.
“Now hold on Seagull, are you saying that Ima paid $.75 more in tourism tax than Ira did for the same thing?
“That’s exactly right.”
“That doesn’t make any sense at all, same lodging price, same ticket price, same Branson, the amount of tourism tax paid by each should be the same. Why isn’t it?
“If an Ole Seagull were going to hazard an opinion it would be because the resellers don’t collect it and pay it and the city lets them get away with it.”
“Resellers” buy tickets and lodging at, what most people could consider, whole sale prices, add their markup, and then retail them to the public. In the vast majority of cases, the four percent Branson Tourism Tax is only collected on the wholesale price that the reseller pays for the product. The rationale appears to be that the difference between the whole sale price paid by the reseller and what they sell it for at retail is a “service charge” and is not subject to the tax.
“But Seagull, what’s the difference between the local “Walkmarget Store” buying widgets at wholesale, adding their markup, and then retailing them to the public? Isn’t the amount of tax due based on the retail price charged? “In order, the answers appear to be ‘none’ and ‘of course it is.’”
As written, the state law regarding this tax says that it applies to the price “paid or charged” to any “transient person” for, among other things, hotel, motel, and condo rooms in Branson and to the price paid or charged for any admission ticket to or participation in any private tourist attraction. The net result of the way this law is currently being enforced by the city is that, potentially, millions of dollars in tax revenues, that would be available to the city for infrastructure and marketing, are not currently being collected by the city and have not been for years.
"Do I have this right Seagull, the tax applies to the price that is charged not to who is charging it?”“That’s the way it appears to read.”
“Is a reseller a ‘transient’ person?” “Not normally.”
“Then why doesn’t the city require the tax to be collected on the full price that the resellers charge?” “That’s the million dollar question!”
