LR 8268
Taxability of Purchases by Government Employees from outside Missouri
September 25, 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 July 27, 2023.
The facts as presented in your letter ruling request are summarized as follows:
Applicant is a company with branches located in Missouri that border other states. Because of this, government employees from outside of Missouri will purchase parts and repair services at the Missouri locations. The government employees provide their out-of-state tax exemptions for purchases and repairs at the Missouri locations as a basis for tax exemption.
A specific example was provided as follows:
A Hwy Dept. brought their equipment to our Missouri branch for repair. They have a valid KS governmental exemption. Customer believes they should not have to pay sales tax and claims they do not pay sales tax on other purchases or repairs completed at other Missouri companies.
ISSUE:
Is Applicant required to collect and remit sales tax from government agencies with out of state tax exemptions?
RESPONSE:
Yes. Applicant is required to collect and remit sales tax from government agencies with out of state tax exemptions.
Section 144.020.1, RSMo, imposes a tax "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."
Missouri Code of State Regulations 12 CSR 10-103.600(1) provides, "in general, the sale of tangible personal property is subject to tax unless a specific statute exempts it." While 12 CSR 10-110.955(3)(b) explains that "sales to other states and their political subdivisions are not exempt from tax."
Sales to government agencies of other states will not be exempt unless there is another basis for the exemption. This includes government agencies with out of state tax exemptions; there is no Missouri sales tax law that exempts sales on the basis of exemption in another state. See Tulley Equipment Company, Petitioner, v. Director of Revenue State of Missouri, Respondent., 1987 WL 51164, at *4.
Therefore, sales to government agencies with out of state tax exemptions will not be exempt from Missouri tax unless there is another basis for the exemption.
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 Michael C. Reed General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.
Sincerely,
Wayne Wallingford