Missouri Rules Sale and Installation of Grave Monuments Not Taxable
Tuesday, March 26th, 2013
The Missouri Department of Revenue (DOR) recently ruled that the sale and installation of grave monuments is not subject to sales tax. Mo. Ltr. Rul. No. LR 7218 (Dept. of Revenue Feb. 19, 2013).
The party that requested the letter ruling sells and installs grave monuments, which are permanent structures attached to concrete foundations. Title to the monument passes to the purchaser after the monument is installed. The monument installer requested a ruling to determine whether its sales of grave monuments are subject to sales tax as sales of tangible personal property.
In Missouri, when tangible personal property is affixed to real property and title to the tangible personal property then transfers to the purchaser, the transaction is not subject to tax. Mo. Code Regs. tit. 12, sec. 112.010(3)(A). Also, contractors in Missouri are considered to be the final consumers of tangible personal property purchased to complete a contract to improve real property. Therefore, there is no taxable sale of tangible personal property when contractors attach tangible personal property to real property. Mo. Code Regs. tit. 12, sec. 112.010(1).
The DOR determined that the sale of a grave monument when (1) the monument installer is acting as a contractor and (2) transfer of title to the monument occurs after the monument is affixed to the foundation is not a sale of tangible personal property. Therefore, the DOR ruled that the sale and installation of a grave monument is not subject to tax.
However, the DOR also explained that a taxable sale would occur if (1) the grave monument is sold without installation or (2) the installation charge and the monument are separately stated and title to the monument passes to the purchaser before installation.
Additionally, the DOR explained that if the monument installer acts as a retail seller on some occasions and as a contractor on others, it should purchase the monuments under a resale exemption certificate and pay no tax at the time of its purchases. Then, in those cases when the monument installer acts as a retailer, it should collect and remit sales tax on its sales of the monuments. But, in the cases when the taxpayer acts as a contractor, it should self-accrue tax on the purchase price of the monument installed.
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