LR 8078

Taxability of UTV and Golf Cart Sales

December 23, 2019

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 received on November 1, 2019.

The facts as presented in your letter ruling request and telephone conversation with the Director's counsel are summarized as follows:

Applicant is an individual in Missouri who occasionally purchases used off-road utility vehicles (UTVs) and golf carts free from tax for the purpose of resale. Applicant is employed full-time and currently resells these items only as a hobby. So far, Applicant has only sold a couple of used golf carts. Applicant intends to continue reselling these items and expects to make more sales if successful. These off-road vehicles do not have titles. Applicant does not make any repairs or any changes to the UTVs or golf carts. Applicant sells them to others in the same condition as they were when purchased.

ISSUE:

Should Applicant collect sales tax on amounts he receives for selling the UTVs and golf carts?

RESPONSE:

Yes. Applicant should collect and remit sales tax on amounts he receives for selling the UTVs and golf carts if such sales:

1) do not constitute the sale of a "motor vehicle" as that term is defined in section 301.010, RSMo, and

2) exceed three thousand dollars ($3,000) or more in a calendar year.

Section 144.020.1, RSMo, imposes a sales tax "for the privilege of titling new and used motor vehicles . . . purchased or acquired for use on the highways . . . of this state which are required to be titled under the laws of the state of Missouri and, except as provided in subdivision (9) of this subsection, 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.."

Section 144.070, RSMo, provides that a purchaser of a motor vehicle must pay sales tax on the purchase price of that motor vehicle directly to the Department of Revenue at the time of titling that vehicle. In that case, the seller (Applicant) is not required to collect sales tax. However, this section only applies to the purchase of a "motor vehicle" as that term is defined in section 301.010, RSMo. "All-terrain vehicles" are considered motor vehicles, but "off-road utility vehicles," "recreational off-highway vehicles," and "utility vehicles" may not meet the definition of motor vehicle. Below are the definitions for each vehicle:

Section 301.010, RSMo provides the following relevant definitions:

(1) All-terrain vehicle -- any motorized vehicle manufactured and used exclusively for off-highway use which is fifty inches (50") or less in width, with an unladen dry weight of one thousand five hundred (1,500) pounds or less, traveling on three (3), four (4), or more nonhighway tires. terrain vehicle -- any motorized vehicle manufactured and used exclusively for off-highway use which is fifty inches (50") or less in width, with an unladen dry weight of one thousand five hundred (1,500) pounds or less, traveling on three (3), four (4), or more nonhighway tires.

* * *

(35) Motor vehicle -- any self-propelled vehicle not operated exclusively upon tracks, except farm tractors.

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(49) Recreational off-highway vehicle -- any motorized vehicle manufactured and used exclusively for off-highway use which is more than fifty (50) inches but no more than sixty-seven (67) inches in width, with an unladen dry weight of two thousand (2,000) pounds or less, traveling on four or more nonhighway tires and which may have access to ATV trails.

* * *

(70) Utility vehicle -- any motorized vehicle manufactured and used exclusively for off-highway use which is more than fifty (50) inches but no more than sixty-seven (67) inches in width, with an unladen dry weight of two thousand (2,000) pounds or less, traveling on four or six wheels, to be used primarily for landscaping, lawn care, or maintenance purposes.

* * *

(72) Vehicle -- any mechanical device on wheels, designed primarily for use, or used, on highways, except motorized bicycles, vehicles propelled or drawn by horses or human power, or vehicles used exclusively on fixed rails or tracks, or cotton trailers or motorized wheelchairs operated by handicapped persons.

Applicant sells UTVs and golf carts that do not have titles. UTVs do not have to be titled by the purchaser. Therefore, Applicant must collect and remit sales tax on these sales, but only if Applicant's sales exceed $3,000 in any calendar year.

Section 144.010.1(13), RSMo, defines "sale at retail" to be "any transfer made by any person engaged in business as defined herein of the ownership of, or title to, tangible personal property to the purchaser, for use or consumption and not for resale in any form as tangible personal property, for a valuable consideration[.]" Section 144.010.1(14), RSMo, defines "Seller" as "a person selling or furnishing tangible personal property or rendering services, on the receipts from which a tax is imposed pursuant to section 144.020."

Section 144.010.1(2), RSMo, defines "Business" to include:

[A]ny activity engaged in by any person, or caused to be engaged in by him, with the object of gain, benefit or advantage, either direct or indirect, and the classification of which business is of such character as to be subject to the terms of sections 144.010 to 144.525. The isolated or occasional sale of tangible personal property, service, substance, or thing, by a person not engaged in such business, does not constitute engaging in business within the meaning of sections 144.010 to 144.525 unless the total amount of the gross receipts from such sales, exclusive of receipts from the sale of tangible personal property by persons which property is sold in the course of the partial or complete liquidation of a household, farm or nonbusiness enterprise, exceeds three thousand dollars in any calendar year.

Emphasis added.

Applicant sells used UTVs and golf carts to others. If Applicant's sales comprise less than $3,000 in any calendar year, Applicant is making isolated sales in Missouri which are excluded from sales tax. If Applicant's activities result in Applicant receiving more than $3,000 in gross receipts for any calendar year, Applicant is engaged in business under the Sales Tax Law and must register and collect and remit sales tax on his sales of UTVs and golf carts.

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 Senior Counsel Benjamin C. Slawson, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475 (phone 573-751-0961), or me.

Sincerely,

Ken Zellers