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Sales and Use Tax on Delivery Charges

Contributed by James E. Cash, Certified Public Accountant

On May 12, 2017, the Missouri Legislature passed Senate Bill 16, which provides that usual and customary delivery charges that are stated separately from the sale price shall not be subject to sales and use taxes.

This legislation was passed in response to previous guidance issued by the Missouri Department of Revenue (DOR) in which the DOR relied on the Missouri Supreme Court ruling in “Alberici Constructors, Inc. v. Director of Revenue” as basis to generally deem delivery charges are intended to be part of the sale of tangible personal property and are therefore subject to sales and use tax, even if separately stated.  The High Court’s ruling in Alberici specifically involved delivery charges on out-of-state construction crane rentals.

The Missouri Restaurant Association has been actively advocating Senate Bill 16 through the legislative process on behalf of its members to clarify the taxability of delivery charges.  The bill was delivered to Governor Eric Greitens for signature with an effective date of August 28, 2017.  The governor has until July 14, 2017, to decide whether to sign the bill into law.

SB 16 was sponsored by Senator Will Krauss (R – Lee’s Summit).

James Cash is a CPA with Schowalter & Jabouri, PC  – an allied member of MRA.

Author: MRA
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