JEFFERSON CITY, Mo. – The Missouri Supreme Court decided last year that delivery charges are subject to the sales tax and, now that the Department of Revenue has determined rules for implementing the tax, at least one group is unhappy.
In its Aug. 9 newsletter, the Missouri Propane Gas Association warns that taxes on delivery could be collected in 21 counties, cities and community improvement districts that already tax the utility. Propane is not taxed statewide.
“If your company is located in a jurisdiction that collects local sales tax on domestic use propane, you would collect tax on all non-metered deliveries, even to accounts that are located in jurisdictions that have not imposed local sales tax on propane,” wrote Steve Ahrens, the association’s executive director. “If your retail location is located in a jurisdiction that does not collect a local utility tax, you would only collect tax if delivering to a metered account that is located within a jurisdiction that has imposed a domestic utility sales tax.”
In Jan. 2015, the Missouri Supreme Court ruled that delivery charges should be included in the sales tax. The Department of Revenue recently sent a letter to registered companies informing them of the rules for implementing the decision.
According to the Department of Revenue, several factors determine whether a tax should be charged, but “In general, if parties intend delivery to be part of the sale of the tangible personal property, the delivery charge is subject to tax even when the delivery charge is separately stated.”
Factors determining the tax can include:
- When title passes from the seller to the purchaser;
- Whether the delivery charges are separately stated;
- Who controls the cost and means of delivery;
- Who assumes the risk of loss during delivery; and
- Whether the seller derives financial benefit from delivery.
