Missouri – Fees for Group and Personal Pilates Classes are Taxable

SALT Report 1795 – The Missouri Department of Revenue issued guidance regarding the taxability of fees for group and personal Pilates classes.  A Missouri taxpayer provides personal and group Pilates classes for a fee and by appointment only.  Other than the equipment that will be used in the class, the fee paid by the client does not allow the client access to any other equipment.

Missouri section 144.020.1(2), RSMo imposes tax on “the amount paid for admission and seating accommodations, or fees paid to, or in any place of amusement, entertainment or recreation, games and athletic events.”  In a prior case, the Supreme Court of Missouri held that locations with more than a “de minimis” amount of amusement, entertainment, or recreation are subject to tax. Further, the Supreme Court rejected an argument that made a distinction between health benefits and recreation in cases involving exercise facilities.  Instead, ruling that amounts or fees paid are taxable without regard to whether the facility is predominantly focused on health benefits or exercise.

Therefore, the Department ruled that the Taxpayer’s Pilates studio has more than the amount of activity necessary to subject it to the tax imposed in §144.020.1(2), RSMo and as a result the fees charged by the Taxpayer are subject to tax.

For Further Information:

Missouri Department of Revenue – Letter Ruling LR 7145