PURPOSE: This rule specifies that the taxpayer is liable for county sales tax where items purchased under an exemption certificate are subsequently withdrawn from inventory.
(1) When a person who purchases items under an exemption certificate withdraws items from inventory for personal use, these items are subject to county sales tax if they were purchased within a county imposing a county sales tax regardless of where the items are used. The taxpayer must report the county sales tax due on his/her next return.
- (A) Example. Mr. Law operates an antique store in Blue County, a county which does not have a county sales tax. Mr. Law purchases three (3) antique chairs from a dealer located in Hill County and issues the dealer an exemption certificate. Mr. Law decides to withdraw one (1) chair from his inventory and uses it in his home. Hill County has a county sales tax. Since the chair was purchased in Hill County, Mr. Law must remit both state and county sales tax based on the cost of the chair, on his next return.
- (B) Example. Mr. Brown operates an appliance store in Straw County, a county which has a county sales tax. Mr. Brown purchases all of his appliances from a company located in Light County which also has a county sales tax. Mr. Brown issues an exemption certificate to his supplier for all of his purchases. Mr. Brown decides to take a stove out of inventory for use in his home. Mr. Brown must remit state and county sales tax based on the cost of the stove on his next return. Light County’s county sales tax would apply as the stove was purchased in Light County. Should Mr. Brown use the stove for one (1) year in his home and subsequently return the used stove to his stock of goods, sales tax would be due on the selling price of the stove when resold to a subsequent purchaser. In this situation, Straw County’s county sales tax would apply.
AUTHORITY: sections 67.515 and 67.706, RSMo 1986. Original rule filed Sept. 7, 1984, effective Jan. 12, 1985.