- Associated Press - Tuesday, February 24, 2015

JEFFERSON CITY, Mo. (AP) - The Missouri Supreme Court on Tuesday ruled that the state went too far to collect sales taxes from a Joplin health center, potentially scaling back the Department of Revenue’s authority as it faces scrutiny for taxing businesses.

At issue is a Powerhouse Gym in Joplin, which rented out space to a personal training company.

The health center went to the Administrative Hearing Commission, which settles disputes with other state agencies, after the Department of Revenue tried to collect back sales taxes for leasing the space.


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The judges said renting space and not providing other services, such as a private gym membership for those personal trainers, was not enough reason to tax the gym.

It’s unclear how many fitness centers across the state could be affected by the ruling.



The ruling comes as lawmakers have criticized the Department of Revenue for new interpretations of the tax code that subject more businesses to sales taxes, such as fitness centers.

Legislation to exempt health clubs from sales taxes failed last year after it was vetoed Democratic Gov. Jay Nixon.

This session, lawmakers are trying to require the Revenue Department to notify businesses of any changes in interpretation of the tax code that could apply to them, an effort to protect companies who might not realize they’re suddenly expected to pay those taxes. If the department does not notify businesses, they would not be subject to pay back taxes.

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Tax notification bill is SB 18.

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Online:

Senate: https://www.senate.mo.gov

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Follow Summer Ballentine at https://www.twitter.com/esballentine.

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