SALT Report 2008 – The Missouri Department of Revenue issued a letter ruling regarding a Taxpayer’s purchase of equipment shipped to an office location outside of Missouri. The Taxpayer operates a financial services company and entered into a contract with an employee to do work in an office in another state. The Taxpayer requested guidance as to whether its purchases of equipment from a Missouri vendor for shipment to the out-of-state employee are taxable.
Under Missouri Code of State Regulations 12 CSR 10-113.200(1) sales tax is imposed on tangible personal property that is sold in Missouri when title to the property transfers to the buyer in Missouri. To help determine when title is passed, the Department provided the following example: “While visiting Missouri an Illinois resident purchases a set of luggage at a Missouri department store. The buyer requests that the seller ship the luggage to an Illinois address. This sale is not subject to Missouri sales or use tax because title does not transfer in Missouri. Missouri Code of State Regulations 12 CSR 10-113.200(1)(4)(D).”
The Department determined that the Taxpayer’s equipment purchase is not subject to sales tax because the vendor was to ship the equipment from a Missouri facility to another state. Therefore, title did not transfer until the equipment was delivered to the out-of-state employee.
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