Taxation Law in Missouri

Editor:
John P. Barrie, Esquire

Sales/Use Tax - Purchases of supplies for taxpayer’s own use on its tow boats subject to tax. Commercial Barge Line Company and American Commercial Barge Line LLC v. Director of Revenue, No. 09-0723RS (Mo. A. H. C. May 13, 2013), Winn, C.

Taxpayers operated towboats on the Mississippi River and purchased consumable goods (including food, lightbulbs, paper towels, etc. for use on its boats) and claimed the purchases where not subject to sales or use tax because towboats were “in commerce”. The director determined that the taxpayers were liable for tax and the taxpayers appealed to the administrative hearing commission.

Held:
Taxpayers liable for sales and use tax.  The commission found that because the purchases were determined to be in Missouri at the time of delivery to the tow boats, the purchases were subject to Missouri tax.  In so holding, the commission accepted the rebuttable presumption that for sales on the river, deliveries to northbound boats are treated as delivered in Illinois and deliveries to southbound boats occur in Missouri. While the tow boats traveled “in commerce” the sales were determined to be complete upon delivery in Missouri.