LR 8341
Taxability of Equipment Used by Retailer to Move Fertilizer
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 January 2, 2025.
The facts as presented in your letter ruling request are summarized as follows:
Applicant will be purchasing a 2024 John Deere 204 G-Tier Compact Wheel Loader. The Wheel Loader will include Bucket Dump Speed Control, Skid Steer Quick Connect, and a Quick Tach Coupler along with an additional year of warranty coverage. This is for Applicant’s retail location, where they sell agricultural seed, chemicals, and fertilizer to farmers who use these products directly on their farmland to produce farm products to be fed to livestock or sold ultimately at retail. Applicant will use the new loader to (1) move fertilizer out of the fertilizer house onto Applicant's truck, to be delivered directly to the farmer and his farmland, or to an airport from where the agricultural fertilizer will be applied to the farmer’s farmland via plane or (2) to put agricultural fertilizer in the hopper, which delivers the fertilizer to Applicant's fertilizer blender; once the agricultural blend is mixed, a belt will take it to the back of a tender truck or fertilizer rig for delivery to the customer’s farmland.
ISSUE:
Is Applicant’s purchase of the Compact Wheel Loader subject to sales tax?
RESPONSE:
Yes. Applicant’s purchase of the Compact Wheel Loader is subject to Missouri sales tax.
Section 144.020.1, RSMo, imposes a tax upon all sales of tangible personal property or rendering a taxable service at retail.
Section 144.030.2(22), RSMo, provides an exemption for sales of farm machinery and equipment. It defines ‘farm machinery and equipment’ as “[n]ew or used farm tractors and such other new or used farm machinery and equipment, including utility vehicles used for any agricultural use[.]”
For the purpose of the exemption, “agricultural purpose” is the raising of crops or farm animals. While Applicant’s customers participate in agricultural purposes, Applicant’s use of the equipment is separated from the actual agricultural purpose described by the statute. Therefore, it is not exempt under Section 144.030.2(22), RSMo.
Additionally, Applicant’s tax rate should be based on the location of Applicant’s vendor.
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