LR 8200
Furniture Purchased from a Third-Party Subject to Tax
July 29, 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 May 16, 2022.
The facts as presented in your letter ruling request and in a conversation with Senior Counsel Thomas A. Houdek are summarized as follows:
Applicant is a business located outside the State of Missouri that provides architecture and interior design services. One of Applicant's clients is a company with a location in Missouri, but the main headquarters of the company is located outside Missouri (Client). As part of the services Applicant provided to Client, Applicant ordered furniture that would be used in Client's business.
Applicant purchased the furniture from the furniture company, located outside Missouri. The furniture company delivered the furniture to Client's location in Missouri. Once the furniture is delivered to Client's location, Client pays Applicant for the furniture. Applicant pays the furniture company for the furniture.
ISSUE:
Is the furniture Client purchased from Applicant subject to Missouri state and local sales tax?
RESPONSE:
Yes. The furniture Client purchased from Applicant is subject to Missouri state and local sales tax.
Section 144.020.1, RSMo, imposes a sales tax on retail sales of tangible personal property. Missouri Code of State Regulations 12 CSR 10-113.200(1) provides "[i]n general, a sale of tangible personal property is subject to sales tax if title to or ownership of the property transfers in Missouri." Missouri Code of State Regulations 12 CSR 10-113.200(3)(A) provides "[t]itle transfers when the seller completes its obligations regarding physical delivery of the property, unless the seller and buyer expressly agree that title transfers at a different time." Missouri Code of State Regulations 12 CSR 10-113.200(3)(C) provides "[w]hen an out-of-state seller delivers tangible personal property to a third-party common or contract carrier for delivery to Missouri, title transfers in Missouri."
Applicant ordered Client's furniture from an out-of-state furniture company. The furniture company delivered the furniture to Client in Missouri. At the time of delivery title transfers to Applicant and then to Client. Because title to the furniture transferred to Client when the furniture was delivered to Client in Missouri, the furniture Client purchased from Applicant is subject to Missouri state and local sales tax. The applicable sales tax rate would be that of the location where title or ownership of the tangible personal property occurs, which is at the Client's location.
Applicant is required to file a sales tax application with the Department of Revenue. Once the application is finalized, Applicant will file a sales tax return with the Department of Revenue and remit the Missouri state and local sales tax collected. If Applicant decides not to conduct business in Missouri after this transaction is complete, Applicant is required to file a final return, and on the return, state Applicant will cease doing business in Missouri.
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 Thomas A. Houdek, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475 phone (573)-751-0961.
Sincerely,
Wayne Wallingford