Missouri Rules Free-Standing Storage Units Not an Improvement to Real Property

Friday, March 13th, 2015

 
 
A free standing storage unit.
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Missouri
Manufacturing

The Missouri Department of Revenue ruled that free-standing closet organization products are taxable tangible personal property.

The taxpayer was a nationwide seller of home organization products with locations in Missouri. The taxpayer was creating a new closet organization product ("Product") that could either stand freely or be attached to the walls of a home. The Product is attached with small screws and finishing nails that limit damage to the wall. The taxpayer asked if the Product was subject to sales tax.

Missouri taxes sales of tangible personal property. Tangible personal property does not include improvements to real property. Improvements to real property are items that are attached to real property in such a way that they become part of the real property.

The Product was subject to sales tax. The Product was tangible personal property, not an improvement to real property. The Product did not have to be attached to a wall and, if it was attached, was easily removed with little damage. Therefore, the taxpayer had to collect sales tax on Product sales.

http://dor.mo.gov/rulings/show.php?num=7513


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