RE: Orders Taken Outside Missouri
March 12, 2007
Dear Applicant:
This is a letter ruling issued by the Director of Revenue pursuant to Section 536.021.10, RSMo and Missouri Code of State Regulations 12 CSR 10-1.020, in response to your letter dated January 5, 2007.
The facts as you presented them in your letter are summarized as follows:
Applicant is a corporation located in the state of Arkansas. Applicant sells off-road diesel to a buyer located in Missouri. Applicant purchases its supply of off-road diesel from an oil company for resale in two Missouri cities. Applicant delivers the diesel to the buyer’s construction site in Missouri. Applicant has a business location in Missouri that does not participate in this sale.
Is the sale of off-road diesel subject to sales tax or use tax?
Yes. The sale of off-road diesel is subject to sales tax. Pursuant to Section 144.020.1 RSMo, a sales tax is imposed, in relevant part, “upon all sellers for the privilege of engaging in the business of selling tangible personal property or rendering taxable service at retail in this state. The rate of tax shall be . . . a tax equivalent to four percent of the amount paid or charged for rental or lease of tangible personal property.” Pursuant to Missouri Code of State Regulations 12 CSR 10-117.100(3)(A)(4), in relevant part, “if the order is taken outside Missouri for a sale of tangible personal property subject to Missouri sales tax, the sale is subject to the local sales tax in effect where title to the item transfers to the purchaser.”
Based upon the information provided by Applicant, the sale of off-road diesel to the buyer is subject to sales tax because Applicant uses a fuel source in the state of Missouri to engage in the business of selling tangible personal property in the state of Missouri. The applicable local tax is the location where the title is transferred to the buyer. As such, Applicant should file a Missouri sales tax return using the total of the state tax rate and the local sales tax rates at the location of the construction site.
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 If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest, and penalties, which may be imposed prospectively from the date of the change.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 Amy Bartolomucci, Office of General Counsel, Post Office Box 475, Jefferson City, Missouri 65105-0475 (phone 573-751-0961), or me.
Sincerely,
Trish Vincent