Stay up to date with sales tax: Join our mailing list!


A company’s sales of canned software that is downloaded by customers over the internet are not subject to Missouri sales and use tax. The company’s database file software will only be able to be purchased and downloaded on the company website, and the software is not customized for customers. The company’s website is maintained on a server outside of Missouri. Customers purchasing the software never take possession of tangible personal property. As such, purchases of the software downloaded over the internet are not subject to Missouri sales and use tax. (Letter Ruling No. LR 7074, Missouri Department of Revenue, March 29, 2012)

(05/21/2012)

A company that leases commercial business equipment should collect and remit Missouri use tax on amounts paid by its customers on leases of equipment that were purchased from vendors outside of Missouri when the equipment is stored, used, or consumed in Missouri. The location used for determining the local use tax that should be collected and remitted is where the equipment first comes to rest in Missouri. In essence, this means where the item is first delivered in Missouri. The company should collect and remit sales tax on the amounts paid by its customers on leases of equipment that were purchased from vendors in Missouri. The location used for determining the local sales tax that should be collected and remitted is the location of the vendor who sold the equipment. The lessor should separately state each lease payment for each piece of equipment in order to collect and remit the correct state and local sales or use tax. (Letter Ruling No. LR 6989, Missouri Department of Revenue, December 16, 2011)

(05/21/2012)

The Missouri Supreme Court, reversing a decision of the Administrative Hearing Commission, held that a convenience store is not exempt from sales and use tax on electricity purchased for its food preparation operations. Missouri tax law provides a tax exemption for the “processing” of products, but the court held that retail food preparation does not meet that definition as intended by the legislature. “Processing” is defined under the statute, but the definition is ambiguous. The court reached its decision based on the following factors: the industrial connotation of other words within the statute, previous court holdings that processing is essentially the same as manufacturing, and another court holding that restaurants do not engage in manufacturing. As preparing food for retail consumption is not “processing” within the meaning of the statute, the convenience store was not entitled to a refund of sales and use tax paid on electricity used to power its food preparation operations. (Aquila Foreign Qualifications Corp. v. Director of Revenue, Supreme Court of Missouri, No. SC91784, March 6, 2012)

(04/20/2012)

An out-of-state online retailer with nexus in Missouri should collect and remit Missouri vendor’s use tax on its sales of tangible personal property to Missouri customers because the orders are approved outside of Missouri and the products are shipped from a location outside of Missouri. The retailer should collect and remit the local use tax at the location where the product is first delivered in Missouri. If the retailer has no sales in Missouri for the tax period, it must still file a vendor’s use tax return. The return for such a period would be a zero return. (Letter Ruling No. LR 7029, Missouri Department of Revenue, February 3, 2012)

(03/26/2012)

A company’s sales of data that is electronically downloaded onto customers’ computers in PDF format is not subject to Missouri sales tax because there is no sale of tangible personal property subject to tax under Missouri tax law. Additionally, the company’s service is not an enumerated service subject to sales tax under Missouri tax law. (Letter Ruling No. LR 7047, Missouri Department of Revenue, March 7, 2012)

(03/26/2012)

Pages

Scroll to Top