LR 8312
Applicant has an opportunity to service leases for personal vehicles.
July 31, 2024
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 18, 2024.
The facts as presented in your letter ruling request are summarized as follows and are the same facts that you provided in the letter ruling request you sent to the Department:
Applicant is a financial servicing company. For their clients with lease portfolios, Applicant provides various sales tax services including maintaining sales/use tax rates. Applicant has an opportunity to service leases for personal vehicles. The lessor is a Missouri lessor, they elect to pay sales tax on
lease receipts rather than the purchase price of the vehicles, the leases are over 60 days, and a person at the car dealership is authorized to execute the vehicle lease agreement on behalf of the lessor.
ISSUE 1:
If a Missouri lessee of a motor vehicle moves within Missouri, is the local motor vehicle sales tax rate updated to the new address?
RESPONSE 1:
Yes. The local motor vehicle sales tax rate would be updated to the lessee's new address.
Section 144.069, RSMo, provides:
All sales taxes associated with the titling of motor vehicles, trailers, boats and outboard motors under the laws of Missouri shall be imposed at the rate in effect at the location of the address of the owner thereof, and all sales taxes associated with the titling of vehicles under leases of over sixty-day duration of motor vehicles, trailers, boats and outboard motors shall be imposed at the rate in effect, unless the vehicle, trailer, boat or motor has been registered and sales taxes have been paid prior to the consummation of the lease agreement at the location of the address of the lessee thereof on the date the lease is consummated, and all applicable sales taxes levied by any political subdivision shall be collected and remitted on such sales from the purchaser or lessee by the state department of revenue on that basis.
Applicant has not paid all motor vehicle sales taxes prior to the consummation of the lease agreement, so all taxes associated with the motor vehicle shall be imposed at the rate in effect. The local rate "in effect" would be the location of the lessee at the time of the lease payment.
ISSUE 2:
If Applicant's lessee moves out of Missouri, are the lease receipts subject to Missouri motor vehicle sales tax?
RESPONSE 2:
No. The lease receipts are no longer subject to Missouri motor vehicle sales tax. As noted in Response 1, the tax payments on the lease receipts are imposed at the rate "in effect." There is no Missouri motor vehicle sales tax "in effect" for vehicles owned and operated out-of-state by non-Missouri residents.
ISSUE 3:
If an out-of-state lessee moves into Missouri, is the motor vehicle sales tax rate updated to the applicable motor vehicle sales tax rate at the lessee's address?
RESPONSE 3:
Yes. The motor vehicle sales tax rate is updated to the applicable motor vehicle sales tax rate at the lessee's address. See Response 1.
ISSUE 4:
If an out-of-state lessee moves into Missouri, do the lease receipts from an out-of-state dealership become subject to Missouri motor vehicle sales tax at the motor vehicle sales tax rate applicable to the lessee's address?
RESPONSE 4:
Yes. The non-Missouri dealer motor vehicle sales tax rate would be applicable at the lessee's new address. See Response 3.
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 Associate Counsel J. Ross Shelton General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.
Sincerely,
Wayne Wallingford