Sellers Subject To Sales Tax (Rescinded August 9, 1993)

AUTHORITY: section 144.270, RSMo 1986. This rule was previously filed as rule no. 28, Jan. 22, 1973, effective Feb. 1, 1973. S. T. regulation 010-5 was filed Dec. 31, 1975, effective Jan. 10, 1976. Amended: Filed Aug. 13, 1980, effective Jan. 1, 1981. Amended: Filed April 29, 1983, effective Sept. 11, 1983. Emergency rescission filed Feb. 19, 1993, effective March 1, 1993, expired June 28, 1993. Rescinded: Filed Feb. 19, 1993, effective Aug. 9, 1993. State ex rel. Thompson-Stearns-Roger v. Schaffner, 489 SW2d 207 (Mo. banc 1973). The legislature’s repeal of old section 144.261 and enactment of new section 144.261 abolished the need for review by the tax commission before judicial review could be sought. Act can only properly be held to have intended to restore the prior system of direct judicial review, without intervening administrative review, of the director’s (of revenue) decisions in sales tax matters. Therefore, after the director had rejected claimant’s request for refund of sales and use tax, claimant was entitled to direct judicial review by mandamus, without need to seek review of decision by State Tax Commission. Martin Coin Co. of St. Louis v. Richard A. King, 665 SW2d 939 (Mo. banc 1984). The court held in Scotchmen's Coin Shop v. Administrative Hearing Commission, 654 SW2d 873 (Mo. banc 1983) that sales of coins for their value as precious metal constituted the sale of personal property subject to sales tax. Martin Coin attempted to distinguish its activities from those of Scotchman’s by asserting that it was an agent between two principals and that it was not a vendor, but merely a broker. Martin Coin purchased the coins in question on its own line of credit, was liable to the vendor of the coins, bore the risk of nonpayment by its customers, deposited the proceeds from the sales in its own bank account and paid the supplier for coins ordered. In the court’s opinion, Martin Coin was involved in both a) the purchase of coins from the supplier and b) the sale of coins to customers. The latter constituted a taxable event. Additionally, the court noted that while Martin Coin attempted to label itself an agent, rather than a vendor, there was no evidence in the record to indicate that the vendors of the coins had any control over Martin Coin; thus a key element of agency was lacking. The court refused on procedural grounds to hear the issue which Martin Coin raised in its brief concerning invasion of the federal government’s exclusive power to regulate foreign commerce. Chase Resorts, Inc. v. Director of Revenue, Case No. RS-85-0780 (A.H.C.7/30/87). Petitioner stores and rents boats. In conjunction with this business, Petitioner arranges 10–15 sales each year of boats stored in its slips. The Department of Revenue assessed petitioner sales tax on the sales of these boats on the theory that petitioner was the “seller” of the boats, as defined in 144.010.1(9), RSMo. Petitioner entered into written agreements with boat owners to arrange sale of these boats for a commission. Petitioner’s responsibilities regarding these sales included publishing lists of boats for sale and showing the boats. In nearly every case, payment was made directly from the buyer to the boat owner. Petitioner never held title to the boat. The Administrative Hearing Commission held petitioner did not act as a seller of the boats, as it did not direct who was to receive title and took physical control of the boats only when directed and then only as an agent of the owner. Barter Systems International v. Director of Revenue, Case No. RS-84-2357 (A.H.C. 11/9/88). The taxpayer operated as one part of its business an exchange for its member clients to barter goods and services with one another. The member-to-member trades did not involve cash, only goods and services. The taxpayer acted as a conduit between members. It notified one member when another member had some item to trade and kept records of the transactions. The selling member set the price and was responsible for remitting sales tax to the department. Taxpayer did not police the price of the goods exchanged. The Administrative Hearing Commission concluded that the taxpayer operated a business which regularly bought and sold goods in the showroom. The taxpayer purchased goods using the clients’ assets’ accounts. The buying of goods using its own funds consisting of clients’ assets’ accounts and selling them to the customer on its own terms constituted two separate transactions, one between petitioner and the original supplier and one between petitioner and its customers. The Administrative Hearing Commission concluded that the two separate transactions could not be collapsed into one by describing petitioner as merely a conduit between its buyer and a customer (see Martin Coin Co. of St. Louis v. King, 665 SW2d 939 (Mo. banc 1984)). H. Matt Dillon, d/b/a Midwest Home Satellite Systems v. Director of Revenue, Case No. RS-85-1741 (A.H.C. 12/9/88). The Administrative Hearing Commission found that sellers must obtain signatures on each individual invoice or written acknowledgement that a purchase is being made under an exemption certificate or letter if the certificate is not presented anew for each transaction; auctioneers acting for undisclosed principals are subject to sales tax as the seller of tangible personal property; and that auctioneers acting for disclosed principals must maintain satisfactory evidence of that fact.