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.

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