SCHEDULE A CONSULTATION

MO legislature overrides Nixon’s veto of bill exempting instructional classes from sales tax

The Missouri General Assembly voted on September 14 to override the governor’s veto of Senate Bill 1025. This bill exempts from sales tax amounts paid for “instructional classes,” such as those given at dance studios, gymnastics facilities and other fitness facilities. The bill became law after the override of the governor’s veto.

Dance imageIn the Missouri legislature, a veto can be overridden only by a two-thirds vote in both chambers of the legislature. It passed in the House by a vote of 124-31 and passed in the Senate by a vote of 29-2.

Under current law, charges and fees at places of recreation are subject to sales tax if they offered a “diversion” to the customer. For a long time, it was hard to discern whether a business was offering educational services or entertainment (“diversion”) services. Senate Bill 1025 clarifies that taxable activities do not include amounts paid for “instructional classes” provided at recreational centers.

If you have any questions about how this may affect you or your business, please contact your WK advisor at (573) 442-6171 or (573) 635-6196.

OTHER STORIES FOR YOU
MO SALES TAX LETTERS: DELIVERY CHARGES. The Taxation Division of the Missouri Department of Revenue recently began to issue alerts to all Missouri taxpayers registered for sales tax collection, indicating they might have an obligation to charge and remit sales taxes on delivery charges that were previously thought to be exempt from taxation.
STATES CHALLENGE 1992 SUPREME COURT DECISION BY PASSING NEW SALES TAX LAWS. In 1992, the United States Supreme Court ruled in Quill Corp. v. North Dakota that states cannot impose sales taxes on retailers unless the retailers have physical presence in the state. But times have changed, and the advent of online retailing recently caused two state legislatures to challenge this decision.
CLICK-THROUGH NEXUS: NOW SELLING GOODS ONLINE CAN MAKE YOU LIABLE FOR SALES TAXES. Beware, all you online sellers: If you sell goods to buyers in other states, and you do so using companies that have “nexus” in those states, such as Ebay, Etsy or Amazon, you will be liable for collecting and remitting sales tax on those sales.

Posted By Katie Barthel, CPA on 9-21-2016 | Topics: Client Alerts, News,