Missouri – Taxability of Purchases Made on Behalf of a Federal Agency

SALT Report 1574 – The Missouri Department of Revenue issued a Letter Ruling regarding the taxability of a contractor’s purchases made on behalf of a government agency.  The contractor has a “cost plus award fee contract” with the Department of Energy where he receives an annual fee and is reimbursed for certain costs.
Typically, the contractor will purchase any equipment or materials needed to operate and manage the Department of Energy plant; upon delivery of the property title is passed to the DOE and the Contractor is reimbursed for his expenses.
The Department determined that the Contractor’s purchases of tangible personal property made on behalf of the Department of Energy are not subject to Missouri sales and use tax since the contractor did not retain title or an ownership interest in the property, therefore no taxable transaction occurred.
To maintain the non-taxable status the Contractor is required to obtain a copy of the DOE’s exemption letter and Form 149 to present to its suppliers.
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