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

Friday, February 1st, 2013

 
 
Share
Link
Missouri
General

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.

Florida Exempts Generators Used in Assisted Living...

Thursday, May 24th, 2018 -Florida recently adopted an emergency rule on exempt sales of emergency generators for use at nursing homes an...

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...