Missouri—Sales and Use Tax: Taxpayer Failed to Establish Portable Toilets Rental Was a Non-Taxable Service
MISSOURI: The Supreme Court of Missouri (Court) affirmed the administrative hearing commission’s (commission’s) decision that a taxpayer was properly subject to Missouri sales and use tax on its rentals of portable toilets because the taxpayer failed to prove that the true object of his rentals was the waste removal service and not the toilet itself.
The Court focused on whether the portable toilets were rented or whether they were a necessary or mandatory part of the service transaction. The taxpayer argued his entire portable toilet business was a service, and because portable toilet services are not listed as a taxable service, the legislature did not intend to impose sales tax on them. Therefore, any receipts attributable to providing a portable toilet device are excluded from the definition of taxable receipts because it was a part of the overall service provided. The Court concluded that while the taxpayer claimed he has a portable toilet rental service, without providing the portable toilets to its customers, there would be no service to provide.
The taxpayer also urged the Court to apply the true object test because customers actually were seeking waste removal services and not portable toilet rentals. The Court declined to apply this test stating the statute’s plain language was clear: sales tax is to be levied upon the total sale price, including the rental of tangible personal property. The taxpayer’s constitutional argument also failed because the taxpayer was never engaged in a service or transaction not subject to sales, use, or transaction-based taxation.
For the above reasons, the Court affirmed the commission’s decision. Gott v. Director of Revenue, Missouri Supreme Court, No. SC98444, December 22, 2020
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