LR 8240
Taxability of Branded Packing Materials
May 26, 2023
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 communication of March 9, 2023.
The facts as presented in your letter ruling request, as well as communications with you, are summarized as follows:
Applicant sells packaging materials. Applicant has recently purchased a digital printer that will allow Applicant to print customer's branding on the packaging materials.
ISSUE:
Are Applicant's sales of packaging materials in Missouri subject to Missouri sales tax?
RESPONSE:
Yes. Applicant's sales of packaging materials in Missouri are subject to Missouri sales tax.
Section 144.020.1, RSMo, provides "[a] tax is hereby levied and imposed... 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 144.010.1(13), RSMo, defines "Sale at Retail" as "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."
Regulation 12 CSR 10-113.200(1) provides, "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 10-103.220(3)(A) provides "[a] taxpayer may purchase tangible personal property or taxable services for resale if the purchase is for subsequent sale at retail."
Applicant's sales of packaging materials is subject to Missouri sales tax as long as title transfers to the customer in Missouri.
Applicant's sales may be exempt from Missouri sales tax if the customer is purchasing the packaging materials for resale. The customer should provide a Missouri Exemption certificate to Applicant indicating that the packaging materials are being purchased for resale. Applicant must maintain a copy of the exemption certificate.
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 If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change.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 Nathan Jefferson, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.
Sincerely,
Wayne Wallingford