Auctioneers and Other Agents Selling Tangible Personal Property

PURPOSE: This rule interprets the sales and use tax law as it applies to sales of tangible personal property when an auctioneer or other agent is involved in the sale. (1) In general, an auctioneer who does not disclose the principal will be considered the seller of the tangible personal property and will be required to collect and remit sales tax on the gross receipts of the property sold. The principal is liable for collecting and remitting the tax if the auctioneer discloses the principal to the purchasers at the auction. An organization exempt from tax on its sales (see 12 CSR 10-110.955) acting as an agent to sell tangible personal property to raise funds for the exempt organization is not required to collect and remit tax; the principal must collect and remit the tax. All other agents selling tangible personal property, by consignment or otherwise, must collect and remit tax even if the principal is disclosed. (2) Definition of Terms. (A) Agent—a person who acts on behalf of a principal. (B) Auctioneer—an agent licensed as an auctioneer who sells tangible personal property belonging to another at public or private auction and who receives compensation for conducting the sale. (C) Principal—a person who empowers another to act on his/ her behalf. (3) Basic Application of Tax. (A) The principal is liable for collecting and remitting the tax if the auctioneer discloses the principal to the purchasers at the auction. An auctioneer may disclose the principal by written or oral communication to the purchasers. (B) Tangible personal property sold at public or private auction in the course of the partial or complete liquidation of a household, farm or non-business enterprise is not subject to tax. See 12 CSR 10-103.200. (C) Tangible personal property, except inventory of the seller, sold at public or private auction in the course of a liquidation of a business is not subject to tax. The sale of inventory is subject to tax. (4) Examples. (A) An auctioneer conducts a weekly auction in which the auctioneer sells various items obtained from numerous undisclosed principals. The auctioneer must collect and remit sales tax on these sales. (B) An auctioneer conducts an auction on behalf of a disclosed principal. The principal is responsible for collecting and remitting the sales tax on the sales. (C) A retired farmer contracts with an auctioneer to sell the assets of the family farm. The receipts from these sales are not subject to tax because the assets are sold in the course of a partial or complete liquidation of a household, farm or nonbusiness enterprise. (D) A grocery store is going out of business and contracts with an auctioneer to sell the fixtures and inventory of the store. The sales of the cash registers, display counters and refrigeration equipment are not subject to sales tax as a liquidation of a business. The sales of inventory items such as groceries are subject to sales tax. (E) An antique store sells some goods on consignment from the owners. The store agrees with the owners to split the proceeds of the sale, 60% to the owner and 40% to the store. The store must collect and remit tax on the entire sale price even if it discloses the owners of the consigned goods. (F) An art gallery sells works by artists for a commission. The gallery must collect and remit tax on the entire sale price even though the artists are disclosed. (G) A parent teacher organization (PTO) agrees with a candy company to sell candy as a fundraiser for a public elementary school. The PTO buys the candy from the company and has the right to return any unsold candy over the minimum agreed amount. The sale is not subject to tax because the PTO is the seller of the candy and its sales are exempt from tax as sales by a public elementary school. (H) A parent teacher organization agrees with a wrapping paper company to sell wrapping paper as a fundraiser for a public elementary school. The PTO takes orders for the wrapping paper and forwards the orders to the company. The PTO never takes title to the wrapping paper—it merely takes the orders and delivers the paper. The company must collect and remit tax because the company is the seller of the wrapping paper. AUTHORITY: section 144.270, RSMo 2000.* Original rule filed Sept. 9, 2004, effective March 30, 2005. *Original authority: 144.270, RSMo 1939, amended 1941, 1943, 1945, 1947, 1955, 1961.