Missouri – Taxability of Gas Used to Power a Water Pump

3/4/2013

SALT Report 2209 – The Missouri Department of Revenue issued a letter ruling regarding the taxability of gasoline used to fuel generators.  The Taxpayer in this case owns property in Missouri.  The property has a small lake that contains fish and is also used by local wildlife.  Because of this, the Taxpayer uses an electric pump that is powered by a gasoline generator to pump water into the pond during Missouri’s dry season.  The Taxpayer requested guidance as to whether its purchases of gasoline for use in the generator are exempt from the fuel tax and from sales tax.

In their decision, the Department referred to section 142.815.1, RSMo, which provides that, “Motor fuel used for…non-highway purposes is exempt from the fuel tax imposed by this chapter, and a refund may be claimed by the consumer if the tax has been paid and no refund has been previously issued.”  Therefore, because the Taxpayer is using the gasoline to power a generator for non-highway purposes, the Taxpayer’s purchases of gasoline are exempt from fuel tax.

However, the Department warns that although section 144.030.2(1), RSMo, exempts from sales tax, “Motor fuel or special fuel subject to an excise tax of this state…”  the exemption from sales tax will not apply if the Taxpayer requests a refund of the fuel tax.

For Further Information

Missouri Department of Revenue – Letter Ruling LR 7194