Chiefs owe nearly $1M in back taxes related to Arrowhead renovation, Missouri claims

Chiefs resod Arrowhead Stadium field for AFC championship game

The Chiefs’ could be opening their pocketbook wide after a Missouri state agency claimed the team owes almost $1 million in back taxes, the Kansas City Star reported.

According to a state panel that sorts out disputes with state agencies in Missouri, the Chiefs owe $930,000 in back taxes plus interest from purchases related to their renovations of Arrowhead Stadium.

Consumable items such as cookie bouquets and champagne as well as the bronze statue of Chiefs founder Lamar Hunt Sr. were not taxed, though the team later admitted that they should have been.

Because taxpayers paid for $250 million of the $375 million price tag to renovate the stadium more than 10 years ago, the Administrative Hearing Commission now says the Chiefs need to pay back the taxes for the more unnecessary items.

Sreenivasa Rao Dandamudi, the commissioner of the panel, said the Chiefs should have owed more, but because the primary vendor for that part of the project, Ghostfire Design Inc., is based in Missouri, it had been assessed for used taxes — which is for out-of-state vendors — the Chiefs can’t be hit with a higher owed number.

“This commission is unable to hold the team liable for sales taxes on purchases from Ghostfire without a (tax) assessment by the Department of Revenue,” Dandamudi wrote in his assessment.

The discovery of the taxes owed is from a 2014 audit, when the revenue department said $23 million in purchased items were “improperly claimed” from 2008-10. Items such as leotards for cheerleaders, autographed footballs, a framed jersey of Bills Hall of Fame running back Thurman Thomas, weight equipment, televisions and lockers were not taxed.

The Chiefs denied they owed $1.8 million in delinquent taxes and late fees, and it took three years for the case to finally reach a hearing. Even with the evidence supporting the state’s case, the Chiefs plan to appeal the decision.

The team also plans to move forward with more renovations amounting to $10 million before the start of next season.