The Missouri Administrative Hearing Commission ("Commission") recently released a decision that a taxpayer's boat dock rentals were taxable.
The taxpayer owned and operated a yacht club. The taxpayer had eleven boat docks, which it divided into 165 slip spaces. Customers paid rent for the right to dock a boat in a slip. The taxpayer had replaced at least four of the docks since 1991.
Missouri taxes rentals of tangible personal property. Missouri's property tax law includes floating docks in a list of tangible personal property and excludes them from the definition of "commercial real estate." However, Missouri's real estate appraisal law refers to boat docks as part of real property.
The Commission decided that the boat docks were tangible personal property because property tax law treated them as personal property. Missouri law could treat the docks as part of real property in the appraisal context but as personal property for tax purposes. The Commission noted that docks were easily replaced and that it made sense to treat them as personal property. The taxpayer was therefore liable for sales tax on its rentals.