LR 8378
Taxability of Installation Service
January 08, 2026
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 November 12, 2025.
The facts as presented in your letter ruling request and subsequent phone conversation on December 3, 2025 are summarized as follows:
Applicant is a Wisconsin-based manufacturer of paint booth equipment who has been contracted by Purchaser to ship and install paint booth equipment in a St. Louis location. Purchaser provided a Certificate of Direct Pay Authorization to Applicant for this project. Applicant is subcontracting some design services, labor services, and material from Subcontractor. Subcontractor will in turn subcontract some electrical work to Supplier.
Applicant does not have a contractor's license for the state of Missouri. Because of this, Applicant enters into contract with Subcontractor for Subcontractor to install the paint booths Applicant manufactures for Purchaser's St. Louis location. Subcontractor will purchase materials from Supplier. These materials will then be sold to Applicant as part of the contract between Applicant and Subcontractor to install the paint booth. Applicant is currently registered for vendors use tax in Missouri but is not registered for sales tax. Purchaser is the ultimate end user of the paint booth sold by Applicant.
ISSUE 1:
Is Subcontractor's installation of Applicant's paint booth taxable?
RESPONSE 1:
No. Subcontractor's installation of Applicant's paint booth is not taxable as Subcontractor is providing labor and labor is not subject to sales tax.
Section 144.020.1(1), RSMo, provides:
A tax is hereby levied and imposed...upon all sellers for the privilege of engaging in the business of selling tangible personal property or rendering taxable service at retail in this state.
Section 144.021.1, RSMo, provides:
The purpose and intent of sections 144.010 to 144.510 is to impose a tax upon the privilege of engaging in the business, in this state, of selling tangible personal property and those services listed in section 144.020...
Installation of equipment is not a taxable service listed under Section 144.020 RSMo. Applicant should not collect sales tax from Subcontractor because Applicant's contract with Subcontractor is for the purposes of installing paint booth equipment manufactured by Applicant. However, to the extent that Subcontractor sells materials to Applicant as part of Subcontractor installing Applicant's paint booth equipment, Applicant should provide Subcontractor with a Form 149 Sales and Use Tax Exemption Certificate.
ISSUE 2:
Should Applicant furnish Subcontractor a copy of the Certificate of Direct Pay Authorization and provide Subcontractor with a completed Form 149 Sales and Use Tax Exemption Certificate to exempt Applicant's purchase of materials from Subcontractor?
RESPONSE 2:
Yes. Applicant should receive a completed Form 149 from Purchaser and Applicant should provide the completed Form 149 to Subcontractor along with furnishing Subcontractor with a copy of the Certificate of Direct Pay Authorization.
Applicant was furnished a copy of the Certificate of Direct Pay Authorization that Purchaser had been approved for. Applicant should in turn furnish a copy of this Certificate of Direct Pay Authorization to Subcontractor, and Subcontractor should furnish a copy to Supplier. Additionally, for the purchase of materials necessary to fulfill the contract between Applicant and Subcontractor, Purchaser should complete a Form 149 Sales and Use Tax Exemption Certificate and provide the completed Form 149 to Applicant. Applicant can then provide the completed Form 149 to Subcontractor, and Subcontractor to Supplier. On Form 149, Purchaser should choose the exemption for "Machinery and Equipment Used or Consumed in Manufacturing".
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, Gabriel Barnes, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.
Sincerely,
Trish Vincent