Detailed Missouri Development
The Missouri Administrative Hearing Commission recently held that guided fly fishing trips were not subject to sales and use tax. The Missouri-based taxpayer acted as a guide for customers wishing to go fly fishing. The trips varied in pricing depending on the length and nature of the trip. For example, the cost of boat trips were higher than wading trips. All fly fishing trips took place on public lakes and streams in Missouri. The taxpayer did not provide fly fishing classes, but provided instructions to customers while on the water. The Missouri Department of Revenue assessed sales tax for the fees charged for the guided trips on the basis that the taxpayer was charging admissions to places of amusement. The taxpayer appealed the assessment.
Under Missouri law, fees paid to any place of amusement, entertainment, or recreation are subject to sales tax, unless the amounts paid are for instructional classes. Instructional classes are statutorily defined to include “any class, lesson, or instruction intended or used for teaching.” The Commission first concluded that although the taxpayer was providing some instruction to customers, that was not always the case, and therefore its charges were not exempt as instructional fees. The Commission next addressed the Director’s assertion that the taxpayer’s fees were taxable because it operated a “place of amusement, entertainment, or recreation.” In reliance on this position, the state cited to a case in which the Missouri Supreme Court concluded that horse drawn carriage rides around The Plaza in Kansas City were taxable amusements because the carriage operator controlled the carriages, even though the carriages operated on public streets. However, the Commission concluded that the taxpayer’s service was more akin to a charge at issue in another case in which the taxpayer took customers to a riverbank, provided them an inner tube, and directed customers to float down the river to a designated pickup spot. In that instance, the court rejected the Director’s assertion that the river was a place of amusement. The Commission concluded that the situation at hand was analogous to the situation in the latter case. Here, the taxpayer did not control the lakes— the purported place of amusement— and customers did not pay a fee for access to the Missouri lakes. In fact, they were free to fish at any time without paying a fee. The taxpayer enhanced a customer’s fishing experience, but it was not an indispensable element of the amusement, entertainment, or recreation found in fishing on Table Rock Lake or Lake Taneycomo. For more information on Anglers Outfitters, please contact John Griesedieck at 312-665-3024.
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