Missouri Administrative Hearing Commission Rules Movie Theater Concessions Do Not Quaify for Reduced Sales Tax Rate for Food

Friday, February 1st, 2013


The Missouri Administrative Hearing Commission (AHC) released a ruling confirming the term "food" should not include food sold by an establishment for the purposes of the reduced sales tax rate and therefore denied a refund of sales tax paid on concession sales at movie theaters. Mo. Admin. Hrg. Commn., Dkt. No. RS-09-0420 (Nov. 28, 2012).

The taxpayer American Multi-Cinema (AMC) operates movie theaters in the state of Missouri. The movie theaters contain concession stands where food items are prepared. AMC claims the food items sold at the concession stand should be eligible for the reduced sales tax rate because less than 80% of the movie theaters gross receipts are from the sale of food. AMC was denied a refund claim for the sales tax paid on concession sales at its movie theaters by the Department of Revenue and filed a complaint with the Administrative Hearing Committee challenging the Director of Revenue's decision.

While Missouri does have a reduced sales tax rate for food, the term "food" does not include "food or drink sold by any establishment" nor can food "constitute more that 80% of the total gross receipts of that establishment." Mo. Rev. Stat. sec. 144.014. In considering the statutory language in context, the AHC concluded that the concession stand itself is an establishment apart from the movie theater. Furthermore, the concession stand receives all of its receipts from concession sales. Therefore, more than 80% of the total gross receipts from the establishment were from sales of food prepared by the establishment meaning that food sold at the concession stand does not qualify for the reduced sales tax rate. The AHC also cited Wehrenberg v. Director of Revenue confirming that "the food sold at the theater concession stand is for consumption at the theater and are not sold for home consumption" which further concludes the fact that food sold at the concession stand is not eligible for the reduced sales tax rate.

Ultimately, the AHC agreed with Director of Revenue's decision to deny AMC's refund claim for the sales tax paid on the concession sales at its move theater. The AHC found that "food" should not include food sold by an establishment, and the legislative intent was to exclude items sold by commercial food service establishments from the term "food" for purposes of the reduced sales tax rate.

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.

Data Survey Services Not Taxable in South Carolina

Monday, June 24th, 2019 -The South Carolina Department of Revenue recently ruled that business data survey services were non-taxable pr...

Senior Center Cafeterias are Taxable in Missouri

Friday, June 21st, 2019 -Missouri's Director of Revenue recently issued a letter ruling taxing the sale of cafeteria food by a 501(c)(3...

Hot-Air Balloon Rides in Missouri are Taxable When...

Wednesday, June 19th, 2019 -Missouri recently released a letter ruling addressing the taxation of hot-air balloon rides. The taxpayer was ...

Nevada Exempts Certain Medical Equipment

Monday, June 17th, 2019 -Effective July 1, 2019, Nevada will exempt durable medical equipment, oxygen delivery equipment, and mobility ...

Participatory Sports are Taxable in New York

Friday, June 14th, 2019 -The New York Division of Tax Appeals recently denied a refund claim made by an instructor-led indoor spin clas...

Marketplace Facilitators to Collect Tax in Vermont

Thursday, June 13th, 2019 -Vermont recently passed a bill requiring marketplace facilitators to collect and remit sales tax on retail sal...