Studio Room Rental for Photography Sessions Is Subject to Missouri Sales Tax

Letter Ruling No. LR 8013, Missouri Department of Revenue, January 24, 2019, released March 2019

Charges taxpayer received for daily and hourly rentals of its studio rooms for photographic sessions are subject to sales tax.

Section 144.020.1, RSMo, in the pertinent part, provides:

A tax is hereby levied and imposed … 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: …

(6) A tax equivalent to four percent on the amount of sales or charges for all rooms, meals and drinks furnished at any hotel, motel, tavern, inn, restaurant, eating house, drugstore, dining car, tourist cabin, tourist camp or other place in which rooms, meals or drinks are regularly served to the public. (Emphasis added.)

Missouri Code of State Regulations 12 CSR 10-110.220 provides guidance on the application of Section 144.020.1(6), RSMo, to the taxability of sales or charges for rooms provided to the public:

(1) In general, sales or charges for rooms, meals or drinks at a place that regularly serves the public are taxable. …

(3) Basic Application of the Tax.

(A) Charges for rooms, meals, and drinks furnished by hotels, restaurants, and other establishments, in which rooms, meals, or drinks are regularly served to the public, are taxable. Rooms for lodging as well as meeting, banquet and conference rooms are taxable. (Emphasis added.)

Decisions of the Administrative Hearing Commission do not have precedential value. Central Hardware Co. v. Director of Revenue, 877 S.W.2d 593, 596 (Mo. banc 1994). However, the Commission attempts to maintain consistency in its decisions if at all possible, and its decisions are instructive both for the Director and taxpayers. Two recent decisions issued by the Administrative Hearing Commission are instructive here, Joseph and Brenda Crews v. Director of Revenue, Case No. 17-0210 (Mo. Admin. H’r’g Comm’n, March 13, 2018) and The Sawyer Room, LLC v. Director of Revenue, Case No. 14-0444 RS (Mo. Admin. H’r’g Comm’n, May 3, 2018). In Crews, the Commission determined that rental charges for banquet halls operated and rented by a t-shirt retailer were subject to sales tax under Section 144.020.1(6), RSMo. Crews at pp. 2-3. In The Sawyer Room, the Commission found that an event planning business was liable for sales tax that it failed to collect on hourly charges received for the rental of a ballroom to the general public. The Sawyer Room at pp. 6-7.