LR 8187
Marina Boat Space Rental Fees are Subject to Sales Tax
March 25, 2022
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 February 12, 2022.
The facts as presented in your letter ruling request and a discussion with Legal Counsel Stephen S. Krogmeier are summarized as follows:
Applicant rents floating dock space on a daily, weekly, monthly, or annual basis for boaters. Applicant purchased the floating docks from the former operator of the marina. No sales tax was paid on that purchase.
ISSUE:
Are Applicant's receipts from the rental of boat spaces at the marina subject to Missouri sales tax?
RESPONSE:
Yes. Applicant's receipts from the rental of boat spaces at the marina are subject to Missouri 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(8), RSMo, provides:
A tax equivalent to four percent of the amount paid or charged for rental or lease of tangible personal property, provided that if the lessor or renter of any tangible personal property had previously purchased the property under the conditions of sale at retail or leased or rented the property and the tax was paid at the time of purchase, lease or rental, the lessor, sublessor, renter or subrenter shall not apply or collect the tax on the subsequent lease, sublease, rental or subrental receipts from that property.
For the purpose of sales tax, floating boat docks are tangible personal property. See Siverly v. Director of Revenue, Case No. 11-1431 RS (Mo. Admin. Hearing Comm'n, May 13, 2014). Payments for the lease of tangible personal property are subject to tax unless the lessor paid tax on the purchase of the property. Section 144.020.1(8), RSMo; 12 CSR 10-108.700. Here, the lessor did not pay tax on the purchase of the property. Therefore, the lessor must remit sales tax for its receipts from the rental of boat spaces at the marina.
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 If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change.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 Legal Counsel Stephen S. Krogmeier, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, (573)-751-0961.
Sincerely,
Wayne Wallingford