Missouri Supreme Court: No Sales Tax on Out of State Purchase
- Feb 2, 2012 | Will Frei
The Missouri Supreme Court ruled that an individual is not required to pay local sales tax made on an out-of-state boat purchase, since the tax only applies to in-state sales.
Many states struggle to define when they should require internet retailers to collect and remit sales tax on purchases made by their residents. But what about a a resident who physically goes to another state to make a purchase and brings it back?
That is exactly what Missouri resident Craig A. Street did when he went to Maryland to buy a boat, outboard motor and trailer to bring back to Greene County, Missouri. When Street registered his boat with the Missouri Department of Revenue, he was charged local sales tax of $100 on the boat, $78.75 on the motor and $12.44 on the trailer. Street filed a complaint with the Administrative Hearing Commission (AHC), which denied his request for a refund.
However, Street subsequently filed a petition with the Missouri Supreme Court, and the court ruled that Street was in fact entitled to a refund.
The AHC had argued that local jurisdictions are authorized to "impose sales tax to the same extent as the state imposes taxes." Furthermore, according to the AHC, The General Assembly intended that both in-state and out-of-state motor vehicle purchases be taxed equally.
The Missouri Supreme court agreed that local governments could impose sales tax to the same extent as the state. However, it ruled that The General Assembly did not intend the motor vehicle tax be applied to out of state purchases, citing Section 144.020.1. It therefore ruled in favor of Street.