Sheet Metal, Iron and Cabinet Works (Rescinded March 30, 2001)

AUTHORITY: section 144.270, RSMo 1994. This rule was previously filed as rule no. 52 Jan. 22, 1973, effective Feb. 1, 1973. S.T. regulation 010-44 was last filed Oct. 28, 1975, effective Nov. 7, 1975. Refiled March 30, 1976. Amended: Filed Aug. 13, 1980, effective Jan. 1, 1981. Rescinded: Filed Sept. 27, 2000, effective March 30, 2001. State ex rel. Otis Elevator Co. v. Smith, 212 SW2d 580 (Mo. banc 1948). Otis Elevator Company was in the business of designing, constructing, installing and repairing elevators in buildings. Respondent claimed there was no sales tax due to petitioner Smith because the materials used to construct new elevators or to modify existing elevators lost their character or status as tangible personal property and became a part of the real property coincidently with their delivery and attachment to the building. Respondent kept a title retention clause in his contract with the building contractor allowing him to retain title to the elevator until he was paid in full and if not, to remove the elevator. Judge Ellison held this clause prevented the tangible personal property from being joined with the realty. Absent this contractual clause, the court would have reached a different conclusion. Where the contract for installation of new elevators, and reconstruction or major repairs to existing elevators whereby elevator company retains title to materials until paid, the elevator company is liable for sales tax. Had the contract not contained the title retentions clause the elevator company would not be liable for sales tax. Where elevator company does repair work on existing elevators and supplies small parts which become part of the elevator, and does not retain title to the parts, the company is not subject to sales tax. The parts become part of the realty (see Air Comfort Service, Inc. v. Director of Revenue, Case No. RS-83-1982 (A.H.C. 4/25/84) and Marsh v. Spradling, 402 SW2d 537 (Mo. banc 1976)). Roger W. Marsh, d/b/a Bestmade Wood Products v. Spradling, 537 SW2d 402 (Mo. banc 1976). Marsh made kitchen cabinets to order and installed them in new homes. Marsh paid sales tax on the materials and lumber used to make the cabinets. The court held that the cabinets became a part of the realty upon attachment and were not subject to any further sales tax. The case also states that pre-made cabinets from a shop, sold to a purchaser who takes them home and installs them are subject to sales tax.