LR 8265
Taxability of Baking Lesson
August 26, 2023
Dear Applicant:
This is a letter ruling issued by the Director of Revenue under Section 536.021.10, RSMo, and Missouri Code of State Regulations 12 CSR 10-1.020, in response to your letter dated June 27, 2023.
The facts as presented in your letter ruling request and subsequent phone call are summarized as follows:
Applicant is a bakery that makes various food items including decorative cookies. Occasionally, Applicant will host cookie decorating classes. These classes take place during community events at local venues. Applicant charges a fee for entry into their cookie decorating classes, and all materials used in the class are paid for and provided by Applicant. During the classes, one of Applicant's employees teaches participants how to do complex cookie decoration techniques. The leader of the class uses visual aids to show the participants step-by-step how to decorate the cookies.
ISSUE:
Are the admission fees charged for Applicant's cookie decoration classes subject to sales tax?
RESPONSE:
No. The admission fees charged for Applicant's cookie decoration classes are not subject to sales tax.
Section 144.020.1(2), RSMo, provides:
A tax is hereby levied and imposed for the privilege of titling new and used motor vehicles, trailers, boats, and outboard motors purchased or acquired for use on the highways or waters of this state which are required to be titled under the laws of the state of Missouri and, except as provided in subdivision (9) of this subsection, upon all sellers for the privilege of engaging in the business of selling tangible personal property or rendering taxable service at retail in this state. The rate of tax shall be as follows:
(2): [a] tax equivalent to four percent of 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, except amounts paid for any instructional class[.]
Section 144.010.1(5), RSMo, defines 'instructional class' as:
[...] any class, lesson, or instruction intended or used for teaching [.]
Applicant's cookie decorating classes provide specific instructions to their participants on how to decorate the cookies. Therefore, the cookie decorating classes qualify as 'instructional classes' per section 144.010.1(5), RSMo, and so are not subject to tax pursuant to section 144.020.1(2), RSMo.
This letter ruling is binding upon the Department of Revenue with respect to the Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals. If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change. For this reason, the interpretation set forth above should be reviewed on a regular basis. Please note that any change in or deviation from the facts as presented will render this ruling inapplicable.
Should additional information be needed, please contact Legal Counsel Ross Shelton, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.
Sincerely,
Wayne Wallingford