Missouri: Some Thrift Shop Sales Are Exempt
- May 19, 2014 | Gail Cole
As Macklemore tells it, thrifts shops are a treasure trove of gator shoes, velour jumpsuits, and flannel zebra jammies. Yet they’re also a good place to find useful clothes and household goods at a reduced cost. And many thrift shops are nonprofits and provide job training services in addition to good deals.
In Missouri, certain nonprofit thrift shops may sell tangible personal property tax-free. This comes to light thanks to a recently published letter ruling.
A thrift shop owner asked the Missouri Department of Revenue if sales at its thrift shop were subject to Missouri sales tax. In responding in the negative, the department highlighted the Section 144.030.2(21), RSMo, which “provides an exemption from sales tax for ‘all sales made by or to not-for-profit civic… organizations … in their civic or charitable functions and activities.’”
The thrift shop owner discussed in the letter ruling:
- Sells only items donated to it;
- Uses the thrift store for its civic function of providing training to participants in its job leadership training program; and
- Uses all net proceeds from its sales to fund its civic activities.
Because of this, sales at this particular thrift shop are “not subject to sales tax.”
The department reminds that this letter ruling “is binding upon the Department of Revenue with respect to the Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals.” Letter rulings should not be used to guide tax policy.
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