Section 48 Imposition of Tax

• Library: Tax Law 2009

The use tax is imposed on the privilege of storing, using, or consuming within Missouri any article of tangible personal property. Section 144.610.1, RSMo 2000. See 12 C.S.R. §§ 10-113.200, 10-113.300, and 10-117.100. Relevant statutory terms are defined in the following paragraphs.

“Storage” is defined as any temporary keeping or retention in Missouri of tangible personal property purchased from a vendor for any purpose except sale or subsequent use outside of Missouri. Section 144.605(10), RSMo 2000. Before the removal of the term “solely” from the definition of storage in 1999, the Supreme Court of Missouri determined, with respect to “subsequent use solely outside” of Missouri, that the purpose must exist, at the time of the purchase, to use the particular property solely outside of Missouri. U.S. Sprint Commc’ns, Co. v. Dir. of Revenue, 834 S.W.2d 803 (Mo. App. W.D. 1992).

“Use” is defined as “the exercise of any right or power over tangible personal property incident to the ownership or control of that property,” with the exception of the storage or the sale of property in the regular course of business. Section 144.605(13).

“Consumption” is not defined in the Use Tax Law.

“Tangible personal property” is defined as all items subject to the Missouri sales tax as provided in § 144.020.1(1) and (3), RSMo Supp. 2007. Section 144.605(11).

There has been significant litigation regarding the imposition of use tax liability in situations involving interstate shipments of tangible personal property into Missouri. The Supreme Court of Missouri affirmed the Administrative Hearing Commission (AHC) in R&M Enterprises, Inc. v. Director of Revenue, 748 S.W.2d 171 (Mo. banc 1988), holding that the use tax was properly imposed on the price paid by a fabric wholesaler to out-of-state binderies producing fabric sample books sent by contract carrier to the wholesaler’s place of business in Missouri. The wholesaler then addressed and...