LR 8350
Taxability of Professional Design Service Facility
April 30, 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 February 24, 2025.
The facts as presented in your letter ruling request, and previous letter ruling request, are summarized as follows:
Applicant is an architectural, engineering, planning, interiors, graphics, and consulting firm. Applicant’s corporate headquarters is located in Missouri. Applicant operates over twenty offices worldwide, including an office in Missouri in addition to its Missouri headquarters. The offices all provide professional design services, share resources, and are under the central management and direction of Applicant’s Missouri headquarters. While Applicant’s offices are separate and distinct businesses and are operated as separate profit centers, the offices are consolidated for tax purposes because Applicant and its offices are one firm. Applicant’s Missouri headquarters performs firm wide accounting, legal services, IT services, and marketing. Some of Applicant’s executive team live in different cities, but their staff is located at the Missouri headquarters. Applicant performs no construction activity.
ISSUE:
Is Applicant entitled to claim the exemption provided in Section 144.030.2(28), RSMo?
RESPONSE:
Yes. Applicant is entitled to claim the exemption provided in Section 144.030.2(28), RSMo.
Section 144.030.2(28), RSMo, provides an exemption from sales tax for “[c]omputers, computer software and computer security systems purchased for use by architectural or engineering firms headquartered in this state.” The phrase “headquartered in this state” is defined by the statute to mean “the office for the administrative management of at least four integrated facilities operated by the taxpayer is located in the state of Missouri[.]”
Applicant is an architectural firm that operates over twenty facilities worldwide. The office for the administrative management of all of Applicant’s facilities is located in Missouri. The offices all provide professional design services, share resources, and are under the central management and direction of Applicant’s Missouri headquarters, as such, Applicant meets the requirement that its facilities must be integrated. Therefore, Applicant is entitled to claim the exemption under Section 144.030.2(28), RSMo, for its purchases of computers, computer software, and computer security systems for its use.
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