LR 8339
Taxability of Sales Made to Foodservice Facility
February 28, 2025
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 December 10, 2024.
The facts as presented in your letter ruling request are summarized as follows:
Applicant is a food wholesaler that is constructing a new foodservice distribution facility to service its customers within and without Missouri. The newly constructed facility will include warehouse operations such as dry storage, cold storage, loading docks, and material handling equipment. Upon its completion, this facility will span two cities, Berkeley and Ferguson, and the official address for Applicant is within Berkeley city limits as, per the guidelines established on the Department of Revenue website, the facility entrance will be located within Berkeley city limits. Most of Applicant’s sales to Missouri customers from this new facility will be delivered via common carrier. There is no cash register involved in these transactions, however, orders are generally processed in the facility office, which will be located within the Berkeley city limits. Since the facility spans two jurisdictions, some of Applicant’s fixed assets, equipment, and supplies will be in or used across both Berkeley and Ferguson city limits.
ISSUE 1:
Should Applicant source their intrastate sales from their facility to the local rate for Berkeley?
RESPONSE 1:
Yes. Applicant should source their intrastate sales from their facility to the local rate for Berkeley.
12 CSR 10-117.100(3)(A)(1) provides that “[a]ll sales of tangible personal property subject to state sales tax in which the order is taken at a Missouri place of business are subject to the local sales tax in effect at that place of business.”
Applicant states that the orders are generally processed in the facility office, which is located within Berkeley city limits. Additionally, the official place of business location according to the business’ DOR registration is within Berkeley city limits. Therefore, the local rate of Berkeley should apply.
ISSUE 2:
Should Applicant use the local use tax rate on its purchases of items used in the facility to Berkeley?
RESPONSE 2:
Yes. As long as the purchased items are first delivered in Missouri to Applicant’s Berkeley location. However, if the items are not first delivered to Applicant’s Berkeley location, they should use the local use tax rate of the location.
12 CSR 10-117.100(3)(b) provides: “[a] sale of tangible personal property subject to state use tax is subject to the local use tax in effect where the item is first delivered in Missouri.”
Therefore, the local rate applied should be the location of where the item is first delivered in Missouri.
ISSUE 3:
How should Applicant correct out-of-state goods taxed at the wrong rate?
RESPONSE 3:
If Applicant’s purchases are from a vendor responsible for collecting vendor’s use tax pursuant to Section 144.650, RSMo, and the wrong rate is used, the vendor would be responsible for filing an amended return.
If Applicant’s purchases are from a vendor not responsible for collecting vendor’s use tax, and the Applicant’s purchases for use or consumption in the state of Missouri are over $2,000 for a calendar year, then the Applicant would be responsible for filing an amended return.
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), or me.
Sincerely,
Trish Vincent