Charges for Group and Individual Pilates Classes Subject to Tax in Missouri

Thursday, October 11th, 2012

 
 
Share
Link
Missouri
General

The Missouri Department of Revenue recently issued a letter ruling regarding the taxability of fees paid for group and individual Pilates classes in Missouri. Mo. Ltr. Rul. No. LR 7145 (Dept. of Revenue Sept. 11, 2012). The taxpayer provides group and individual Pilates classes to clients. These clients visit by appointment and do not have independent access to any exercise equipment or apparatus. On occasion, the Pilates classes are taught by independent contractors.

Missouri imposes tax upon "the amount paid for admission and seating accommodations, or fees paid to, or in any place of amusement, entertainment or recreation, games and athletic events." Mo. Rev. Stat. sec. 144.020.1(2). The Missouri Supreme Court has held that those locations with more than a de minimis amount of amusement, entertainment, or recreation is subject to sales tax. The Missouri Supreme Court further rejected any distinction between health benefits and recreation in cases involving exercise facilities; fees paid to these facilities will be subject to tax regardless of whether the facility's primary focus is health benefits or exercise. See Spudich v. Dir. of Revenue, 745 S.W.2d 677, 682 (Mo. banc 1988); Michael Jaudes Fitness Edge, Inc. v. Dir. of Revenue, 248 S.W.3d 606, 609 (Mo. banc 2008); Wilson's Total Fitness Ctr., Inc. v. Dir. of Revenue, 38 S.W.3d 424, 426 (Mo. banc 2001).

Based on the rulings above, the taxpayer's Pilates studio has more than the de minimis amount of activity necessary to subject it to state sales tax. The fact that independent contractors teach some of the classes and the use of the facility is mainly for personal health reasons does not change that fact. Therefore, fees for group and individual Pilates classes will be subject to tax.


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

Washington Penalty Reduction Program

Monday, May 21st, 2018 -Businesses that apply to register with Washington's Marketplace Fairness Penalty Reduction Program by June 30,...

Fuel Used to Heat Detached Garages Taxable in Maine

Monday, May 21st, 2018 -Maine Revenue Services recently released a publication explaining that sales tax applies to fuel that is used ...

Cloud Software No Longer Taxable in Indiana

Thursday, May 17th, 2018 -Effective July 1, 2018, cloud software will no longer be taxable in Indiana. Indiana taxes the sale, lease,...

Sales Tax Increase in the Historic Triangle Region of...

Monday, May 14th, 2018 -Effective July 1, 2018, there will be an additional one percent (1%) regional sales and use tax imposed in the...

Sales by Charitable Organizations Generally Exempt in...

Friday, May 11th, 2018 -The Arkansas Department of Finance and Administration recently addressed the taxability of sales made by a non...

Credit Card Convenience Fees Taxable in New York

Wednesday, May 9th, 2018 -The New York Department of Taxation and Finance recently ruled that convenience fees for credit card purchases...