Current through Register Vol. 49, No. 18, September 16, 2024
PURPOSE: This rule explains the taxability of rooms,
meals and drinks provided by hotels, motels, and similar establishments in
which these items are regularly provided to the public. It also covers
purchases made by these establishments. The applicable sections are 144.010,
144.011, 144.020, 144.021, 144.030 and 144.080, RSMo.
(1) In general, sales or charges for rooms,
meals or drinks at a place that regularly serves the public are
taxable.
(2) Definitions. Permanent
resident-An individual who contracts in advance for a room for a period of
thirty consecutive days or more and who actually remains a guest for thirty
consecutive days or more. Businesses do not qualify as permanent
residents.
(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.
(B) A permanent resident
is not subject to tax on their lease or rental payments. A permanent
reservation for any room is not synonymous with permanent resident.
(C) An educational institution, which
furnishes room and board to students in pursuit of their educational
objectives, is not subject to tax on the gross receipts.
(D) Persons engaged in providing rooms are
subject to tax on the gross receipts from the sale of tangible personal
property and taxable services:
1. Receipts
for food or drink are taxable regardless of whether the charge is made per
meal, daily, weekly, or monthly;
2.
In room pay-per-view programs or movies are not subject to tax; and
3. All persons engaged in providing rooms
must collect tax on all charges for telecommunication services, including
intrastate and interstate calls.
(E) Rooms, meals and drinks are exempt from
tax if sold to an exempt organization or a representative of that organization
if the seller has documentation of the exemption. If the representative claims
the exemption, even if the representative pays with his own funds and is
reimbursed, and the hotel has a copy of a valid exemption letter issued by the
Missouri Department of Revenue to the organization, the sale is exempt. An
agent of the United States government paying with a U.S. government credit card
is also exempt.
(F) Persons
providing complimentary meals and drinks or non-reusable tangible personal
property as part of the room accommodation should not pay tax on the purchases.
Non-reusable items include soap, shampoo, tissue, and food or confectionery
items offered to the guests without charge.
(G) The purchaser must pay tax on the
purchase of reusable items including furniture, curtains, linens, towels,
pillows, mirrors, radios and televisions for room accommodation.
(4) Examples.
(A) A hotel rents a room to a guest for a
night. The soap and shampoo are included in the price of the room and may be
purchased tax exempt by the hotel under a resale exemption. The complimentary
breakfast provided to the guest is also included in the price of the room, and
the hotel may purchase the food under a resale exemption. The towels, bed
linens and furniture are subject to tax at the time of purchase.
(B) A hotel provides a complimentary room for
a couple's wedding night. The hotel includes a free bottle of champagne and a
free breakfast. The hotel must pay tax on the cost of the champagne and the
breakfast because the hotel did not charge for the room.
(C) An airline reserves rooms at a hotel
under a long-term room contract. In exchange for room availability, the airline
agrees to pay for all rooms on a guaranteed basis, whether or not it uses the
rooms. The entire charge for the rooms is taxable, regardless of whether the
rooms are actually used.
*Original authority: 144.270, RSMo 1939, amended 1941,
1943, 1945, 1947, 1955, 1961.
