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

Thursday, October 11th, 2012


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.

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