By Virginia Young
April 10, 2014
STL
JEFFERSON CITY • State legislators say they never intended to tax exercise.
But in several decisions over the last 12 years, the Missouri Supreme Court has ruled that fitness clubs are places of “amusement, entertainment or recreation,” a designation that by law triggers collection of state sales taxes on fees the facilities receive.
Now, Republican legislators and business groups say the Missouri Department of Revenue has gone overboard in enforcing the rulings.
The department has been auditing small businesses, such as gymnastics studios, and requiring them to pay three years’ worth of back taxes. The department briefly threatened last month to collect sales taxes on tickets sold by nonprofit theaters, such as the Muny in Forest Park.
On Wednesday, the department’s adversaries mounted a counter-offensive, calling for a Senate investigation of the tax collection agency’s practices under Gov. Jay Nixon, a Democrat, and passage of legislation to notify businesses when tax rules change.
Legislators also want to shift the legal burden of proof, so that businesses in tax disputes are deemed innocent until the state proves them guilty of failing to pay what’s owed.