I rent out my farm's outdoor and indoor space as a wedding venue, with no food, drinks, or overnight stays -- is that rental subject to Missouri sales tax?

Plain-English summary

The Missouri Department of Revenue ruled that a farm operator who rents out its outdoor ceremony area and indoor space (used for recreational purposes and dressing rooms) as a wedding venue must charge Missouri sales tax on those rental fees, even though the Applicant does not serve food or drinks and does not offer overnight accommodations.

Section 144.020.1(6), RSMo, imposes a 4% tax on "rooms, meals and drinks" furnished at hotels, motels, taverns, inns, restaurants, and "other place[s] in which rooms, meals or drinks are regularly served to the public." The Department concluded that the Applicant "regularly rents a room" -- its venue -- to the public, which alone is enough to make the rental fee taxable under this provision, regardless of whether food, drinks, or lodging are also involved.

The Department relied on a prior Missouri Administrative Hearing Commission decision, The Sawyer Room, LLC v. Director of Revenue, Case No. 14-0444 RS (Mo. Admin. Hear'g Comm'n 2018), which held that rentals of space for weddings, receptions, and corporate events are taxable. Because the Applicant's venue similarly provides rental space for weddings, its rental fees are subject to sales tax on the same reasoning.

The ruling also addressed the Applicant's argument based on proposed Senate Bill 535, which would have added specific language to Sections 144.020.1(6) and 144.190, RSMo. The Department clarified that SB 535 was proposed but never adopted and never became law, so its language was never added to the actual statutes and cannot be relied on.

What this means for you

For farm, barn, and outdoor wedding-venue operators

If you rent out event space -- indoors, outdoors, or both -- for weddings, receptions, or similar gatherings, expect that rental fee to be subject to Missouri sales tax under Section 144.020.1(6), RSMo. It does not matter that you don't serve food or drinks, and it does not matter that you don't offer overnight lodging. The Department's position, following Sawyer Room, is that "regularly renting a room" to the public for events is itself enough to fall under the same tax that applies to hotels, motels, and similar venues.

For anyone relying on proposed-but-unenacted legislation

This ruling is a reminder that a bill's mere introduction or proposal in the Missouri General Assembly has no legal effect until it is actually enacted. The Applicant here cited language from Senate Bill 535 as if it applied, but the Department confirmed SB 535 was never adopted and its proposed changes to Sections 144.020.1(6) and 144.190, RSMo, were never added to the statutes. Businesses should verify a bill's enactment status (not just its introduction) before relying on it for tax positions.

Common questions

Q: Does it matter that I don't serve food or drinks at my wedding venue?
A: No. The Department found that "regularly rent[ing] a room" to the public is sufficient by itself to trigger the tax under Section 144.020.1(6), RSMo. Serving food or drinks is not a required element -- the statute covers rooms, meals, or drinks in the alternative.

Q: Does it matter that I don't offer overnight accommodations?
A: No. The ruling did not treat overnight lodging as necessary. The taxable event is the regular rental of a room or space to the public, whether or not guests stay overnight.

Q: Can I rely on a bill that was proposed but never passed, like Senate Bill 535?
A: No. The Department explicitly noted that SB 535, while proposed, was never adopted and never became law, so its language adding provisions to Sections 144.020.1(6) and 144.190, RSMo, does not exist in the actual statutes and cannot be relied on.

Q: How does this ruling relate to The Sawyer Room, LLC v. Director of Revenue?
A: The Department relied on that 2018 Administrative Hearing Commission decision, which held that rentals of space for weddings, receptions, and corporate events are taxable room rentals. The Department found the Applicant's farm venue functionally similar and applied the same reasoning to reach a taxable result.

Citations and references

Statutes and cases:

• Section 144.020.1(6), RSMo (4% tax on rooms, meals, and drinks furnished at hotels, motels, and other places where rooms, meals, or drinks are regularly served to the public)
• The Sawyer Room, LLC v. Director of Revenue, Case No. 14-0444 RS (Mo. Admin. Hear'g Comm'n 2018) (rentals of space for weddings, receptions, and corporate events are taxable as room rentals)

Source

• Landing page: Missouri DOR Rulings Search
• Ruling: LR 8284

Original ruling text

Dear Applicant:

This is a letter ruling issued by the Director of Revenue under Section 536.021.10, RSMo, and Missouri Code of State Regulations 12 CSR 10-1.020, in response to your letter dated November 21, 2023.

The facts as presented in your letter ruling request are summarized as follows:

Applicant operates a location on their farm that allows customers to use their outdoor areas for ceremonies and indoor for recreational purposes and dressing rooms. Applicant's location is used as a wedding venue, and Applicant does not offer food or drink services, nor does it offer rooms for overnight accommodations.

ISSUE :

Are Applicant's sales or rentals of its venue for weddings subject to tax?

RESPONSE :

Yes. The amount Applicant receives for the rental of its venue to members of the public is subject to sales tax.

Section 144.020.1(6), RSMo, imposes:

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. The tax imposed under this subdivision shall not apply to any automatic mandatory gratuity for a large group imposed by a restaurant when such gratuity is reported as employee tip income and the restaurant withholds income tax under section 143.191 on such gratuity[.]

Applicant regularly rents a room, its venue, to the public. In The Sawyer Room, LLC v. Director of Revenue , Case No. 14-0444 RS (Mo. Admin. Hear'g Comm'n 2018), the Administrative Hearing Commission determined that the sales or rentals of a space for weddings, receptions, and corporate events are taxable. Since Applicant's space similarly provides a rental space for weddings, the amount received for the rental of its venue to members of the public is subject to sales tax.

It is noted that Applicant cites to several provisions of Senate Bill 535. It appears this Bill, while proposed, was never adopted, and therefore did not become law. SB 535's added language in section 144.020.1(6) and 144.190, RSMo, was never added to the actual statutes.

This letter ruling is binding upon the Department of Revenue with respect to the Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals.  If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change.  For this reason, the interpretation set forth above should be reviewed on a regular basis.  Please note that any change in or deviation from the facts as presented will render this ruling inapplicable.

Should additional information be needed, please contact Associate Counsel J. Ross Shelton General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.

Sincerely,

Wayne Wallingford