Does a city have to charge sales tax on concessions, sunscreen, swim diapers, and goggles it sells at its municipal aquatics center and other Parks and Recreation events?

Plain-English summary

The Missouri Department of Revenue ruled that a municipality's sales of concessions and other tangible personal property at its aquatics center, and at other events sponsored by its Parks and Recreation Department, are not subject to sales tax. The Applicant sold typical concession-stand food and drink, plus items like sunscreen, swim diapers, and goggles, both at the aquatics facility and at other Parks and Recreation-sponsored events.

Normally, retail sales of tangible personal property are taxable in Missouri, and exemptions are construed narrowly against the taxpayer. But Missouri law carves out a specific exemption for amounts paid or charged at a place of amusement, entertainment, or recreation that is owned or operated by a municipality, as long as all the proceeds benefit that municipality or political subdivision. The Department found the aquatics center and its sponsored events fit that description, since the city owned and operated the facility and every dollar of proceeds went to either the Parks and Recreation Department or the Applicant itself, with no revenue-sharing arrangement with any outside party.

The Department grounded its answer in a 1992 Administrative Hearing Commission decision, City of Jefferson v. Director of Revenue, and noted that an earlier, contrary line of cases was overturned by a legislative amendment to the exemption statute. Because the facts here matched the exemption's requirements -- municipal ownership, recreational use, and proceeds flowing only to the municipality -- the concession and merchandise sales were held exempt.

What this means for you

Municipalities running recreational facilities

If your city or political subdivision owns and operates a place of amusement, entertainment, or recreation -- like a pool, aquatics center, or similar venue -- and all proceeds from admissions, fees, and related sales benefit only the municipality, sales made there (including concessions and small retail items sold alongside the recreational activity) can qualify for this exemption. The key facts the Department relied on were municipal ownership/operation of the venue and that all proceeds stayed within the city government, with no outside revenue-sharing.

Parks and Recreation departments

Selling incidental items at your events or facilities -- food, drinks, sunscreen, swim gear -- doesn't automatically make those sales taxable retail transactions if they occur at, and are tied to, a municipally owned recreational venue and the money benefits the department or city. Keep clear records showing the proceeds' destination, since that is central to the exemption.

Accountants and tax professionals advising local governments

The exemption in Section 144.030.2(17), RSMo turns on ownership/operation by a municipality and on where the proceeds end up -- not on the nature of the specific item sold. Watch for any revenue-sharing agreement with a private vendor or concessionaire, since that could take a fact pattern outside this exemption; here, the Applicant expressly had none.

Common questions

Q: Does this mean all sales made by a city are tax-exempt?
A: No. The exemption is specific to fees, admissions, and other charges at a place of amusement, entertainment, or recreation that the municipality owns or operates, where all proceeds benefit the municipality. Sales unrelated to such a venue, or where proceeds are shared with a non-municipal party, would need separate analysis.

Q: Would this ruling change if the city contracted with a private company to run the concessions?
A: Possibly. The Applicant here confirmed it had not entered into any revenue-sharing agreements related to these sales. A revenue-sharing or concessionaire arrangement that diverts proceeds away from the municipality could change the analysis, since the exemption depends on all proceeds benefiting the municipality.

Q: Can another Missouri municipality rely on this ruling for its own concession sales?
A: Not directly. This letter ruling is binding on the Department only as to the specific Applicant, only for three years from its date, and only as long as the facts don't change and the underlying law isn't changed by the legislature or the courts. Another municipality with similar facts could look to this ruling as an indication of how the Department reasons, but it cannot rely on it directly and should seek its own guidance if the answer matters.

Q: What law creates this exemption?
A: Section 144.030.2(17), RSMo, exempts amounts paid or charged for admission, participation, or other fees at a place of amusement, entertainment, or recreation owned or operated by a municipality or other political subdivision, where all proceeds benefit that municipality or subdivision.

Citations and references

Statutes and regulations:

• Section 144.020.1, RSMo (imposition of sales tax on retail sales and on amounts paid for admission to places of amusement, entertainment, or recreation)
• Section 144.030.2(17), RSMo (exemption for admission/participation fees at a municipally owned place of amusement or recreation where proceeds benefit the municipality)
• Section 536.021.10, RSMo (letter ruling procedure)

Case law cited in the ruling:

• City of Jefferson v. Director of Revenue, 1992 WL 390471 (AHC No. 92-000424RV) (holding that the exemption applies to fees paid by individuals in a municipally owned place of amusement; a prior contrary holding was reversed by legislative amendment)

Subject

Taxability of Concession Sales by Municipalities

Source

• Landing page: Missouri DOR Rulings Search
• Ruling: LR 8365

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 July 7, 2025.

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

Applicant is a municipality that operates an aquatics facility and hosts various recreational events sponsored by the City's Parks and Recreation Department. Through this, Applicant sells concessions at the aquatics center, and other items such as sunscreen, swim diapers, and goggles at the center and other sponsored events. All proceeds from any such sales are used solely for the benefit of the City's Parks and Recreation Department or Applicant. Applicant has not entered into any revenue sharing agreements related to the sale of any of the aforementioned items.

ISSUE :

Are Applicant's sales of concessions and other items of tangible personal property subject to sales tax?

ANSWER :

No. Applicant's sales of concessions and other items of tangible personal property are not subject to sales tax.

Section 144.020.1, RSMo, imposes a sales tax on sales of tangible personal property and certain enumerated services. Section 144.020.1(2), RSMo, provides "[a] tax equivalent to four percent of the amount paid for admission and seating accommodations, or fees paid to, or in any place of amusement, entertainment or recreation, games and athletic events[.]"

Sales of tangible personal property are subject to tax unless a specific exemption applies, and tax exemptions and exclusions are strictly construed against the taxpayer, with any doubt to be resolved in favor of the tax.

Section 144.030.2(17), RSMo, provides, that "all amounts paid or charged for admission or participation or other fees paid by or other charges to individuals in or for any place of amusement, entertainment or recreation, games or athletic events [...] owned or operated by a municipality or other political subdivision where all the proceeds derived therefrom benefit the municipality or other political subdivision [...]"  are not subject to sales taxes.

The exemption contained in Section 144.030.2(17) applies to all fees paid by individuals in a place of amusement and therefore exempts the city's sales of tangible personal property.  City of Jefferson v. Director of Revenue , 1992 WL 390471 (AHC No. 92-000424RV).  (A prior case holding the opposite was reversed by legislative amendment.)

Applicant is a political subdivision that owns the Aquatics Center, and it hosts various recreational events organized by its Parks and Recreation Department. All of the proceeds from the sales at the Aquatics Center, and the various sponsored events it hosts only benefit Applicant or the Parks and Recreation Department. Therefore, Applicant's sales of concessions and other items of tangible personal property are not subject to sales tax pursuant to Section 144.030.2(17), RSMo.

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,

Trish Vincent