Missouri ~ Sales and Use Tax: Home Improvement Store’s Deliveries Not Taxable

The Missouri Department of Revenue ruled that a retail home improvement store’s delivery charges under two different scenarios are not subject to Missouri sales tax. Under the first scenario, the taxpayer’s customer purchases tangible personal property and chooses to have the taxpayer arrange for delivery. The taxpayer charges the customer on the same receipt for the purchased merchandise. The delivery charge is separately stated on the receipt. The taxpayer offers a delivery service through a third-party hauler that is separate from its sales of tangible personal property. The taxpayer derives no benefit from the delivery service and the customer assumes the risk of loss. The customer chooses how the order will be delivered. The customer’s invoice separately states the delivery charge. As the customer and the taxpayer did not intend for delivery to be part of the sale, the delivery charge is not subject to sales tax. Under the second scenario, the customer originally intended to pick up a custom product (i.e., special order refrigerator) upon its arrival at the taxpayer’s store. Once the product arrives at the taxpayer’s location, the customer cannot pick it up and decides to have the order delivered. The taxpayer separately contracts with the customer for delivery that is separate from the previous sale of the tangible personal property. Therefore, the taxpayer’s delivery charges are not subject to sales tax.

Letter Ruling No. LR 7831, Missouri Department of Revenue, June 8, 2017, ¶204-134



All stories by: CCHTaxGroup

Leave a Reply

Your email address will not be published.