Rams seek tax refund, say they overcharged fans

2013-12-26T06:00:00Z 2014-06-10T21:04:34Z Rams seek tax refund, say they overcharged fansBy David Hunn
dhunn@post-dispatch.com > 314-340-8121

ST. LOUIS • It hasn’t been the best decade at the Edward Jones Dome. The Rams, the city’s NFL football team, have lost quarterbacks, coaches, season-ticket holders and plenty of games.

Now team officials are claiming they overcharged fans for their seats, too.

Rams attorneys have filed a tax appeal with the state alleging the team collected a few dimes too many per ticket. They’re asking for a refund of about $400,000 — despite the fact that the team can’t return the money to ticket buyers.

In addition, the Rams have asked the state to forgive $445,000 more in unpaid taxes.

The state’s response so far? Go punt.

The Rams have a history of contesting ticket tax assessments. They have filed six appeals since 2008, totaling $4.7 million at face value.

It’s impossible to tell from the filings exactly what happened with each case. The Missouri Department of Revenue acknowledged that the four closed cases were settled, meaning the Rams likely paid some, but not all, of the taxes the state demanded. The state won’t discuss them further. It claims sales tax receipts are closed records.

And the Rams haven’t returned calls seeking comment.

But the team’s recent flurry started with a state audit in September 2008, in which the Department of Revenue told the Rams that, from 2004 to 2006, the team owed almost $1.4 million in unpaid taxes on luxury club memberships.

A few months later, the Rams protested that assessment.

And that was just the beginning. In August 2009, attorneys for the team filed for a $2.2 million refund. In October, they requested an additional $219,000. In February 2010, $89,000. In 2011, $401,000. And, finally, this past August, Rams attorneys protested a $445,000 assessment.

The Rams’ moves are not unusual in the business world. When big businesses get hit with heavy tax bills, they often hire teams of lawyers to find ways to recover that money.

“Some people are just a little more aggressive in trying to diminish their state tax bills,” said Henry Ordower, a tax law professor at St. Louis University.

It has been especially common in recent years, Ordower said, as states sought ways to increase their tax haul. “Every state has been more assertive in collecting state taxes,” Ordower said. “States need money.”

This isn’t the first time St. Louis sports teams have fought such taxes. The Blues appealed more than $500,000 in back taxes and interest on hockey luxury suites in the 1990s. The Cardinals have appealed taxes multiple times, most recently in 2010, when the team asked the state for a refund for 2008 taxes — the Cardinals had charged season ticket holders for postseason tickets, and then didn’t make the playoffs.

And the city, which separately collects a 5 percent “amusement” tax, has already weighed in on the debate. In 1999, then-License Collector Gregory F.X. Daly — now the city’s collector of revenue — decided not to assess the amusement tax on the full price of Blues, Rams or Cardinals luxury suites.

Now, thanks to redevelopment deals at the Cardinals’ Busch Stadium and the Blues’ Scottrade Center, the Rams are the only team to send amusement tax dollars — about $1.6 million last year — to the city.

But the team is still fighting with the state. Over the past few years, Rams attorneys have essentially made three arguments.

The 2008 state audit, and the Rams appeal that year, largely concerned taxes on the team’s “club memberships.”

The Rams collect about 4 percent in state sales tax, 4.5 percent in city sales tax and an additional 5 percent for the city amusement tax, totaling about $13.50 on a $100 ticket.

But the Rams also sell something called a “club membership.”

Club-level seat tickets cost between $1,400 and $3,500 each this year. Club memberships add $1,000 on top of the ticket price. For the added fee, club members get food and beverage discounts, entry to draft previews, training camp practices and special events, and access to purchase playoff tickets for their own seats, among other things.

In its 2008 filing, the first of the recent appeals, the Rams argued that club memberships are benefits, not tickets, and shouldn’t be subjected to sales taxes.

In later cases, the Rams argued not only that they shouldn’t pay the club taxes, but that they were not subject to state sales tax at all.

Then, in 2011, the Rams found a new argument. Officials discovered they were “erroneously” calculating sales taxes on a base ticket price inflated by the city taxes.

Per ticket, the difference in calculations is small — about 40 cents on a $100 ticket. But multiplied by thousands of tickets over several years?

That led the Rams to file for the $401,000 and $445,000 appeals.

Last Sunday, the Rams played their final home game of the season, against the Tampa Bay Buccaneers. A $30 ticket to the game included $3.57 in taxes — 13.5 percent.

Several fans at the game said they didn’t know how much they were paying in taxes. But not one liked the idea of the Rams pocketing taxes that they paid.

Football games are expensive, some said. Any extra tax refund should go toward reducing prices, improving the stadium, or community service. Not into the team’s pockets.

Others had a hard time believing the Rams made any mistake.

“There’s no misinterpreting a sales tax rate when the businesses right around the corner have to do the same thing,” said season ticket holder and trucking company owner Brant Frey, who’s been coming to games with his family for years.

“I’d love to see a reduction in the prices, of course.”

David Hunn covers public projects & cultural institutions. Follow him on Twitter @davidhunn.

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