Section 32 Legal Effect of Sales and Use Tax Regulations

• Library: Tax Law 2009

Sections 144.270 and 144.705, RSMo 2000, authorize the Missouri Department of Revenue (MoDOR) to promulgate and enforce “reasonable rules and regulations” concerning the administration and enforcement of the Sales Tax Law, §§ 144.010–144.525, RSMo 2000 and Supp. 2007, and the Compensating Use Tax Law, §§ 144.600–144.761, RSMo 2000 and Supp. 2007. See also Multistate Tax Compact, § 32.200, RSMo 2000, art. VII, § 3. Additional rule-making authority is vested in MoDOR by §§ 136.120 and 32.050.2, RSMo 2000. See generally Chapter 27 of this deskbook for further discussion concerning the promulgation and review of MoDOR regulations. House Bill 1828, 94^th Gen. Assembly, 2^nd Reg. Sess. (Mo. 2008), effective August 28, 2008, amended § 144.270 to clarify the provision that requires MoDOR to establish and enforce reasonable rules and regulations to efficiently secure payment of and accounting for all sales and use taxes imposed in Chapter 144, RSMo.

To promulgate rules or regulations of general application, MoDOR must follow specified procedures set forth in Chapter 536, RSMo, regarding notices of proposed rulemaking, public comment submission, order of rulemaking, etc. See generally Chapter 27 of this deskbook and Chapter 2, Administrative Rules and Rulemaking, of Missouri Administrative Law (MoBar 3^rd ed. 2000). The rules are compiled in the Code of State Regulations after promulgation through notices published in the Missouri Register. Both of these publications may be obtained from the Missouri Secretary of State on a subscription basis. Section 536.033, RSMo 2000. Section 536.050, RSMo Supp. 2007, has been amended to permit a challenge to the validity or application of MoDOR’s regulations (and almost all other administrative agencies’ rules) via a declaratory judgment by a court of law without having to exhaust administrative remedies (e.g., appeal to the Administrative Hearing Commission (AHC)). To use this procedure, a court must first determine that one of the following circumstances is present:

• The agency does not have the authority to grant the relief sought or the administrative remedy is inadequate

• The sole issue is a constitutional issue or other question of law

• Requiring exhaustion would result in undue prejudice because of the irreparable harm that would be suffered if immediate judicial consideration is not secured

When a particular question or problem is considered and specifically covered by regulation, there is no need to obtain a ruling from MoDOR. 12 C.S.R. §§ 10-3.002(2) (sales tax) and 10-4.290 (use tax). But the applicability of regulations to individual circumstances may be extremely limited because these regulations are intended only to convey general principles, concepts...