What Missouri Small Business Owners Should Know About Entertainment Tax

Date: February 16, 2016

Proposed bill could provide tax relief.

What Missouri Small Business Owners Should Know About Entertainment Tax

Anyone who’s sweated out a workout on the treadmill at the gym can tell you that it definitely wasn’t entertainment. The state of Missouri, however, seems to disagree.

Under the state’s entertainment tax, businesses like yoga studios, fitness gyms and dance studios must charge sales tax on admissions or fees because they’re considered “places of amusement and entertainment.”

For some businesses, this has come as a surprise during a tax audit because the Department of Revenue hasn’t been clear in spelling out all the businesses that should be charging this sales tax to customers.

Rep. Eric Burlison has filed legislation—House Bill 1463—that would amend this too-broad and murky tax by clarifying what the state considers “entertainment.” The bill proposes to place the distinction on whether customers are participating. This would generally keep the sales tax in place for businesses where customers are spectators and eliminate the tax on businesses whose customers are participants.

Rep. Burlison told KSPR News that he filed this bill to correct a problem that’s been going on for years and has been bad for business, noting that these tax revenues were never voted on by the public and shouldn’t have been collected.

“We’re hitting small business owners that never should have been taxed,” he told KSPR.

The public hearing for HB 1463 was completed in late January, and the Ways and Means Committee Hearing was completed earlier this month.

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