PURPOSE: This rule provides that the taxpayer is liable for transportation sales tax where items purchased under a resale exemption are subsequently withdrawn from inventory and interprets and applies section 94.620.5, RSMo (1986).

1. (1) When a person who purchases items under a resale exemption certificate withdraws items from inventory for personal use, such items are subject to transportation sales tax if they were purchased within a local taxing jurisdiction imposing a transportation sales tax regardless of where the items are used. The taxpayer must report the transportation sales tax due on his next return.

   1. (A) Example 1. Mr. Rusty operates an antique store in Gold City, a city which does not have a transportation sales tax. Mr. Rusty purchases three (3) antique rockers from a dealer located in Mountain City and issues the dealer a resale exemption certificate. Mr. Rusty decides to withdraw one (1) rocker from his inventory and use it in his home. Mountain City has a transportation sales tax. Since the rocker was purchased in Mountain City, on his next return Mr. Rusty must remit both state and transportation sales tax, based on the cost of the rocker.
   2. (B) Example 2. Mr. Kold operates an appliance store in White City, a city which Mass Transportation Tax

has a transportation sales tax. Mr. Kold purchases all of his appliances from a company located in Heavy City which also has a transportation sales tax. Mr. Kold issues a resale exemption certificate to his supplier for all of his purchases. Mr. Kold decides to take a refrigerator out of inventory for use in his home. Mr. Kold must remit state and local sales tax based on the cost of the refrigerator on his next return. Heavy City’s transportation sales tax would apply as the refrigerator was purchased in Heavy City. Should Mr. Kold use the refrigerator for one (1) year in his home and subsequently return the used refrigerator to his stock of goods, sales tax would be due on the selling price of the refrigerator when resold to a subsequent purchaser. In this situation, White City’s transportation sales tax would apply.

1. (C) Example 3. Mr. Lowd operates a radio store in Ham City, which has a transportation sales tax. Mr. Lowd purchases all of his radios from an out-of-state supplier and issues a resale exemption certificate for all of his purchases. If Mr. Lowd decides to remove a radio from inventory to use himself, transportation sales tax would not be due as the radio was purchased from out-of-state.

AUTHORITY: section 94.615, RSMo 1986. T.T. regulation 620-8 originally filed as C.S.T. regulation 540-5A Dec. 31, 1975, effective Jan. 10, 1976. Made applicable by statute and T.T. regulation 615-1, last filed Dec. 31, 1975, effective Jan. 10, 1976.