Delivery of the Sale for Resale Exemption Certificate (Rescinded February 28, 2011)

AUTHORITY: section 144.270, RSMo 1994. S.T. regulation 210-2 was filed Dec. 31, 1975, effective Jan. 10, 1976. Refiled March 30, 1976. Amended: Filed Aug. 13, 1980, effective Jan. 1, 1981. Rescinded: Filed Sept. 13, 2010, effective Feb. 28, 2011. Op. Atty. Gen. No. 13, Burke (4-11-50). Persons engaged in business who do not have resale certificates with respect to certain transactions may offer evidence that such sales were not sales at retail. House of Lloyd, Inc. v. Department of Revenue, Case Nos. RS80-0053 and RS-80-0054 (A.H.C. 7/8/82). The Department of Revenue assessed the taxpayers for Missouri sales and use taxes for supplies purchased for their businesses under improper resale exemption certificates. The commission held that the waiver of the statute of limitations executed by the taxpayer’s bookkeeper was invalid because the bookkeeper-auditor lacked actual authority. The Department of Revenue failed to meet its burden of proof on the issue of the waiver’s validity by failing to show that the department’s auditor had attempted to ascertain if petitioner’s agent was acting within the scope of his authority before the bookkeeper-auditor signed the waiver of the statute of limitations. Overland Steel, Inc. v. Director of Revenue, 647 SW2d 535 (Mo. banc 1983). There were two issues in this case. The first was whether a taxpayer could claim a sales tax exemption for certain steel if sold, on the grounds that the purchasers were to use it in pollution control or plant expansion projects. The second was whether or not the transfer of steel to certain customers in Kansas was a sale subject to sales tax under the Commerce Clause of the United States Constitution. With respect to the first issue, the court found that the taxpayer had the burden of establishing that it was exempt from sales tax, and its failure to produce sales tax exemption certificates, coupled with the dearth of testimony concerning the exempt activities of taxpayer, fails to meet that burden. With respect to the second issue, the court found that when property is purchased subject to a resale certificate, the purchaser becomes liable for sales tax if the property is not resold. In this case the court found that because the taxpayer used the steel in question in its capacity as a contractor there was no resale. Therefore, the taxable event was the taxpayer’s original purchase of the steel in Missouri. It was wholly irrelevant that the construction contract pursuant to which the steel was used was performed in Kansas. There was no violation of the Commerce Clause, and therefore, taxpayer was liable for tax.