SALT Report 1784 – The Missouri Department of Revenue issued a Letter Ruling regarding a Taxpayer who provides project management services in the state. As a part of the Taxpayer’s business he:
- Purchases items on behalf of his clients to be used in construction,
- Obtains building permits,
- Subcontracts labor, and
- Rents equipment
The Taxpayer pays for these items up front along with any applicable sales or use tax and is later reimbursed for these expenses by his clients. The Taxpayer requested guidance regarding the taxability of the reimbursements.
The Department determined that the Taxpayer is not engaged in the business of reselling tangible personal property or providing taxable services in Missouri. Therefore, the Taxpayer is not liable for sales or use tax for the reimbursements or management service fees he receives.
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