LR 8264

Taxability of Property Leased in Missouri by Out of State Lessor

July 31, 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 letter dated June 22, 2023.

The facts as presented in your letter ruling request are summarized as follows:

Applicant is a Florida based company that does not have any physical locations in Missouri. They lease ground support equipment to an air cargo company with offices at the St. Louis Lambert International Airport. The initial term of the lease is six months and the monthly payment is $2,200.


Is Applicant liable for collecting Missouri use tax as a Vendor pursuant to section 144.635, RSMo?


Yes. Applicant is liable for collecting use tax as a vendor pursuant to section 144.635, RSMo.

Section 144.610.1, RSMo, states:

A tax is imposed for the privilege of storing, using or consuming within this state any article of tangible personal an amount equivalent to the percentage imposed on the sales price in the sales tax law in section 144.020.

Section 144.605.13, RSMo, defines "use" as:

The exercise of any right or power over tangible personal property incident to the ownership or control of that property, except that it does not include the temporary storage of property in this state for subsequent use outside the state, or sale of the property in the regular course of business.

  Section 144.635, RSMo, provides:

Every vendor making a sale of tangible personal property for the purpose of storage, use or consumption in this state shall collect from the purchaser an amount equal to the percentage on the sale price imposed by the sales tax law in section 144.020 and give the purchaser a receipt therefor.

Section 144.605.14, RSMo, defines "Vendor" as:

Every person engaged in making sales of tangible personal property by mail order, by advertising, by agent or peddling tangible personal property, soliciting or taking orders for sales of tangible personal property, for storage, use or consumption in this state....

The Director has promulgated regulation 10-114.100 titled: Determining When a Vendor has Sufficient Use Tax as guidance on when a taxpayer is liable for use tax as a vendor pursuant to section 144.635, RSMo.

12 CSR 10-114.100(1) provides:

In general, an out-of-state vendor must register with the department, and collect and remit use tax when the vendor has sufficient nexus with     Missouri. Sufficient nexus exists when the vendor has a physical presence in Missouri.

12 CSR 10-114.100.2(B) defines "physical presence" as:

Owning or leasing real or tangible personal property within this state; or having employees, agents, representatives, independent contractors, brokers or others that reside in, or regularly and systematically enter into, this state on behalf of the vendor.

12 CSR 10-114.100.4(D) provides a relevant example:

An out-of-state taxpayer leases machinery to various customers in Missouri. The taxpayer also sells tools and supplies over the internet to customers in Missouri. The taxpayer must collect use tax on all of its sales and leases in Missouri because its leased property located in Missouri creates sufficient nexus with the state.

(Emphasis Added).

Applicant meets the statutory definition of a vendor as provided in section 144.605.14, RSMo, and maintains a physical presence in this state through its leases of tangible personal property within this state while retaining complete title to the property, and through its use of independent contractors for future maintenance and parts for the leased property. Therefore, they are liable to collect use tax as a vendor pursuant to section 144.635, RSMo.  

In order to determine the proper tax rate, please access the Department's Sales and Use Tax Lookup tool at:

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 J. Ross Shelton, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.


Wayne Wallingford