Instructional classes exempt in Missouri

A long unpopular policy in Missouri applies sales tax to admissions to instructional classes, such as dance classes, fitness classes, and yoga classes. For several years, lawmakers have been working to change this, arguing, in part, that it discourages physical fitness, which the state should instead encourage.

Senate Bill 1025 therefore exempts such instructional classes — “any class, lesson, or instruction intended or used for teaching — from sales tax. The bill was approved by lawmakers earlier this year but then vetoed by Governor Jay Nixon. His reason: it “would require cutting up to $8 million each year from other essential services.” Seems a valid point.

However, the Missouri General Assembly disagreed, voting on September 14 to override that veto. Sen. Will Kraus, the bill’s sponsor, noted that the policy has caused much confusion to business owners over the years. He added, “I do not believe it was ever the intention of the General Assembly to tax these types of classes, just as we do not tax other educational classes.”

Businesses must change point-of-sale systems every time there are changes in product taxability. Sales tax automation software facilitates sales tax compliance in all states, year round. Learn more.