SALT Report 1816 – The Missouri Department of Revenue issued a letter ruling regarding a Taxpayer’s purchases of supplies from an out-of-state vendor for which he does not pay sales or use tax. The Taxpayer provides sealing and coating services for concrete driveways, walkways, and patios. Based on the description of the Taxpayer’s services the Department determined that the Taxpayer is a contractor who uses the supplies in the course of its business.
Under Missouri Code of State Regulations 12 CSR 10-112.010(1), “a contractor is the final user and consumer of the materials and supplies used and consumed in fulfilling a construction contract and which become part of a completed real property improvement. Consequently, persons selling materials and supplies to a contractor are subject to tax on the gross receipts from all such sales because the purchase is not for resale as tangible personal property.”
The Department ruled that because the Taxpayer does not make any sales for resale, the Taxpayer is required to pay tax on the supplies it uses in its business. Since, the taxpayer is purchasing supplies from an out-of-state vendor that does not collect sales or use tax, the Taxpayer is required to accrue and remit use tax to the state.
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