Missouri Rules that Utility Tax on Hotels Does Not Apply to Rooms

The Missouri Department of Revenue has issued a letter ruling stating that hotels, motels, and other transient accommodation establishments should not collect sales tax on utilities used to heat, cool, or provide water to guest accommodations. Guest accommodations include any customer space rented by guests, including sleeping rooms and meeting and banquet rooms. This exemption does not apply to utilities used in common areas. The Department’s decision was made in reference to the 2022 passage of Missouri Bill S.B. 745, which excluded such items from tax. The ruling further states that utilities providers may accept studies to determine what percentage of utilities are exempt and are no longer required to maintain exemption certificates for utilities falling under this exemption.