Section 38 Form and Content of Written Certificates

• Library: Tax Law 2009

All sales of tangible personal property are generally presumed taxable unless specifically exempted by law or regulation. Section 144.010.1(9), RSMo Supp. 2007; 12 C.S.R. § 10-103.600(1). But there are numerous exclusions and exemptions throughout 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. Most of these exclusions and exemptions fall into one of six categories:

1. The status of the purchaser (e.g., farmer, charitable organization, direct pay permit holder, common carrier)

2. The purchaser’s use of a purchased item (e.g., resale, manufacturing)

3. The status of the vendor (e.g., vendor liquidation, exempt vendor)

4. The circumstance of the sale (e.g., occasional sale, contribution of property to a corporation or partnership)

5. The subject matter of the sale (e.g., medical and drug items, motor fuel, domestic utility services)

6. The medium of payment (e.g., food stamps, Women, Infants, and Children (WIC) vouchers)

In this chapter, the primary concern is with the first two categories, which are implemented by the purchaser’s certification, rather than the remaining categories in which the vendor is the claiming party and issues no certificate (and normally retains legal liability for reporting and paying tax if the entitlement is not available). These two categories are activated by a purchaser’s issuance of a written certification to its vendor “claiming” the entitlement. In effect, the purchaser issues its own “ruling” to the vendor.

The burden of proving that a sale is nontaxable is on the vendor. When a vendor accepts an exemptioncertificate in the “good faith” belief that the purchaser is buying the item with the exempt status or for...