The Missouri Department of Revenue recently posted a letter ruling (LR 8264) by their Director of Revenue in regard to a question posed by an applicant. The question was whether the applicant was liable for collecting Missouri Use Tax on leased products as an out-of-state vendor with no other physical presence in the state pursuant to section Mo. Rev. Stat. §144.635. The answer is yes, the applicant is liable for collecting use tax as a vendor pursuant to section Mo. Rev. Stat. §144.635.
According to the law, every vendor making a sale of tangible personal property for the purpose of storage, use, or consumption in Missouri must collect an amount equal to the percentage of the sale price imposed by the sales tax law from the purchaser and provide a receipt.
In this scenario, the taxpayer qualifies as a vendor under Missouri law and is considered to have a physical presence in the state through its lease of ground support equipment to an air cargo company with offices at a Missouri airport. Therefore, the taxpayer is responsible for collecting use tax as a vendor even though they are located out-of-state and have no other physical presence.
It’s important to note that Missouri isn’t the only state that shares this view. In fact, you will need to get a sales tax permit to collect and remit sales tax in every state where you are leasing or renting tangible personal property. You can find more information on rentals and leases in our blog post Sales Tax on Rentals and Leases of Tangible Personal Property.