PURPOSE: Section
144.021,
RSMo, imposes a tax on a seller's gross receipts. Section
144.012,
RSMo, provides the method for determining gross receipts and the applicable
local tax for sales of tangible personal property through vending machines.
This rule also addresses the purchase of vending machines under section
144.518,
RSMo. This rule does not address receipts from amusement
devices.
(1) In general,
sales of tangible personal property, other than photocopies and tobacco
products, through vending machines are subject to tax based on one hundred
thirty-five percent (135%) of the net invoice price of the tangible personal
property. The applicable tax rate is the rate in effect at the location of the
vending machine. Sales of photocopies and tobacco products are subject to tax
on their retail sales price. Purchases of machines or parts for machines used
in a commercial vending machine business are not subject to tax if tax is paid
on the gross receipts derived from the sale of the tangible personal property
through the vending machines.
(2)
Definition of Terms.
(A) Net invoice
price-the cost of the product, including freight, less any quantity or timely
payment discounts allowed by the supplier, with no allowance for spoilage or
loss.
(B) Vending machine-a coin or
currency operated device that is used to sell tangible personal property
without requiring the vendor's physical attention at the time of the sale. The
term vending machine is not limited to mechanically operated devices and
includes honor boxes.
(C)
Vendor-the person who owns the property sold through a vending
machine.
(3) Basic
Application of Tax.
(A) The vendor must
report and remit sales tax on one hundred thirty-five percent (135%) of the net
invoice price of the tangible personal property purchased for sale through
vending machines. The vendor must report and remit sales tax for the period in
which the items are sold or in which the items are removed from inventory due
to spoilage or loss.
(B) Sales of
tangible personal property through vending machines located outside Missouri
are not subject to tax.
(C) Sales
of tangible personal property through vending machines located on the premises
of religious organizations, charitable organizations and public elementary and
secondary schools are not subject to tax.
(D) A vendor with multiple machines or
locations may compute taxable sales for each machine or location either by
specifically identifying the net invoice price of the items sold through each
machine or by using an apportionment method. An apportionment method calculates
taxable sales for each individual location by first determining the percentage
of gross sales attributed to each location. This percentage is then applied to
the net invoice price of the tangible personal property vended and allocates
the same percentage to the location(s).
(E) A manufacturer that sells its
manufactured product at retail through vending machines and wholesale to other
vendors must self-assess tax on its vending machine sales at one hundred
thirty-five percent (135%) of the average price at which the product is sold to
other vendors. A manufacturer who sells its manufactured products to the public
through vending machines and does not make any sales to other purchasers or
vendors must self-assess tax on its vending machine sales at one hundred
thirty-five percent (135%) of the total cost of the manufactured products,
including materials, labor and manufacturing overhead.
(F) No allowance, credit or refund of sales
tax is allowed for spoilage or loss, such as from breakage or theft.
(G) The taxable receipts from a vending
machine are subject to the sales tax at the rate in effect at the location of
the machine.
(H) Sales of
qualifying food through vending machines are subject to the reduced food tax
rate. See
12 CSR
10-110.990.
(I) Purchases of machines or parts for
machines used in a commercial vending machine business are not subject to tax
if tax is paid on the gross receipts derived from the sale of the tangible
personal property through the vending machines.
(4) Examples.
(A) A vendor purchases tangible personal
property for a gross price of $10,000 to sell in its vending machines. The
vendor's supplier allows the vendor a 2% timely payment discount of $200 as
well as a 5% quantity discount of $500. The net invoice price of the tangible
personal property is $9,300 ($10,000 minus $700 total discounts). The amount
subject to sales tax is $12,555 ($9,300 net invoice price multiplied by 135%).
The vendor sold all the products for $20,000. The vendor has vending machines
located at a retail store and at an exempt public elementary school. The sales
at the school were $5,000 (25% of gross sales) and the sales at the retail
store were $15,000 (75% of gross sales). The gross receipts for the exempt
location are $3,138.75 ($12,555 multiplied by 25%) and for the taxable location
are $9,416.25 ($12,555 multiplied by 75%).
(B) A vendor has vending machines located on
the premises of taxable organizations. The machines are located both in the
city of Columbia and rural Boone County. The Columbia machines provided 60% of
the vendor's gross sales and the rural Boone County machines provided 40% of
gross sales. The vendor must report and remit tax on 60% of his gross receipts
at the sales tax rate in effect for Columbia and on 40% at the sales tax rate
in effect for Boone County.
(C) A
commercial vending business purchases a vending machine and places the machine
in an exempt church. The business must pay tax on the purchase price of the
machine because it will not pay tax on the receipts from the machine. The
machine is later moved to a gas station and tax is paid on 135% of the net
invoice price of the goods sold from the machine. The subsequent purchases of
repair parts for the machine are exempt.
(D) A commercial vending business purchases
ten new vending machines. Six of the machines are placed in grocery stores and
other commercial enterprises open to the general public. Four are placed in
schools and churches. The purchase of the six machines is not subject to tax
because the business will pay tax on the receipts from the machines. The
purchase of the four machines is subject to tax because the business will not
pay tax on the receipts from the machines.
(E) A commercial vending business purchases a
vending machine and places the machine in a gas station. The purchase of the
machine is not subject to tax because the business will pay tax on the receipts
from the machine. The machine is later moved to a church. The subsequent
purchases of repair parts for the machine are subject to tax.
(F) A newspaper sold through a vending
machine is subject to tax at 135% of the average price charged to retail
sellers.
Notes
12 CSR
10-103.400
AUTHORITY: section
144.270,
RSMo 2000, and 144.518, RSMo Supp. 2007.* Original rule filed May 1, 2006,
effective Nov. 30, 2006. Emergency amendment filed Aug. 14, 2007, effective
Aug. 28, 2007, expired Feb. 23, 2008. Amended: Filed Aug. 14, 2007, effective
Feb. 29, 2008.
*Original authority: 144.270, RSMo 1939, amended 1941,
1943, 1945, 1947, 1955, 1961 and 144.518, RSMo 1999, amended 2005,
2007.