LR 8271
Taxability of Tangible Personal Property Sold to Out of State Customer
October 30, 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 August 5, 2023.
The facts as presented in your letter ruling request and subsequent phone call are summarized as follows:
Applicant is a resident of Montana who purchased items from a Missouri manufacturer. The items are paid via SQUARE electronic payment and shipped from Missouri to Montana. The items are shipped via the contract carrier United Parcel Service (UPS). The parties do not make any specific arrangements as to risk of loss while in transit or for an earlier transfer of title.
ISSUE:
Does Applicant need to pay Missouri sales tax on their item shipped to Montana?
RESPONSE:
No. Applicant does not need to pay Missouri sales tax on their item shipped to Montana.
Section 144.020.1, RSMo, imposes a sales tax on sales of tangible personal property and certain enumerated services.
Missouri Code of State Regulations 12 CSR 10-113.200(3)(A) provides that "[t]itle transfers when the seller completes its obligations regarding physical delivery of the property, unless the seller and the buyer expressly agree that title transfers at a different time." Missouri Code of State Regulations 12 CSR 10-113.200(3)(B) provides "[u]nless otherwise agreed by the parties, when a Missouri seller delivers tangible personal property to a third-party common or contract carrier for delivery to an out-of-state location, title does not transfer in Missouri and the sale is not subject to Missouri sales tax."
Here, a Missouri seller delivers tangible personal property to a third-party contract carrier to an out of state-location and the parties do not make specific arrangements regarding title. Therefore title transfers in Montana, not Missouri, and because there is no taxable event in Missouri, the transaction is not subject to Missouri sales tax.
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 If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change.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.
Sincerely,
Wayne Wallingford