PURPOSE: This rule aids in determining the responsibilities of a vendor regarding Missouri use tax and interprets and applies sections 144.615(6) and 144.635, RSMo.

1. (1) The burden of proving a sale of tangible personal property was made for resale and not at retail shall be upon the vendor. The vendor is required to secure and retain a signed exemption certificate from the purchaser as evidence that the sale is made for resale and, therefore, exempted from the use tax.
2. (2) When the director of revenue has reason to believe the vendor acted not in good faith in the acceptance of an exemption certificate, s/he is empowered to make an additional assessment of tax due from the vendor. When the vendor has been determined to have acted not in good faith, both vendor and purchaser will be held liable until all liabilities have been satisfied.
3. (3) The vendor must indicate on each invoice or bill of sale the name of each purchaser from whom an exemption certificate has been secured or be subject to the use tax upon the sale. Exemption certificates must be available at the establishment of the vendor for ready inspection and comparison with the deductions claimed.
4. (4) Exemption certificates may not be used to obtain tangible personal property or taxable services to be used by the purchaser and not for resale. It is a crime to misuse the use tax identification number and exemption certificate for the purpose of obtaining tangible personal property or taxable services without the payment of the sales or use tax when it is due.
5. (5) If a vendor sells tangible personal property or taxable services free of the use tax on an exemption certificate when s/he knows or should know in the use of ordinary care, that the property or service which s/he is selling is not for resale by the purchaser, but is for the purchaser’s own use or consumption in business or otherwise, the vendor shall be liable for the use tax.

AUTHORITY: section 144.705, RSMo (1994).* U.T. regulation 650-1 originally filed Oct. 28, 1975, effective Nov. 7, 1975. Refiled March 30, 1976. *Original authority 1959.