Missouri Code of State Regulations
Title 12 - DEPARTMENT OF REVENUE
Division 10 - Director of Revenue
Chapter 110 - Sales/Use Tax-Exemptions
Section 12 CSR 10-110.300 - Common Carriers
Universal Citation: 12 MO Code of State Regs 10-110.300
Current through Register Vol. 49, No. 18, September 16, 2024
PURPOSE: Sections 144.030.2(3), (10), (11), (20) and (30), RSMo, exempt from taxation certain materials, parts and equipment used by common carriers. This rule explains what qualifies for the exemptions.
(1) In general, materials, replacement parts, and equipment purchased for use directly upon, and for the repair and maintenance or manufacture of, motor vehicles, watercraft, railroad rolling stock or aircraft engaged as common carriers of persons or property are not subject to tax. Pumping machinery and equipment used to propel products delivered by pipelines engaged as common carriers are not subject to tax. Railroad rolling stock used in transporting persons or property in interstate commerce is not subject to tax. Motor vehicles licensed for a gross weight of twenty-four thousand (24,000) pounds or trailers used by common carriers in the transportation of persons or property are not subject to tax.
(2) Definition of Terms.
(A) Common carrier-any person that holds
itself out to the public as engaging in the transportation of passengers or
property for hire. A common carrier is required by law to transport passengers
or property for others without refusal if the fare or charge is paid. To
qualify as a common carrier, a carrier must be registered as a common carrier
with all agencies that require such registration, such as the United States
Department of Transportation.
(B)
Contract carrier-any person under individual contracts or agreements that
engages in transportation of passengers or property for hire or compensation. A
contract carrier is a carrier that meets the special needs of certain customers
to transport its passengers or property.
(C) Directly upon-used in a direct manner
without anything intervening and with a certain degree of physical
immediacy.
(D) Motor vehicle-any
vehicle, truck, truck-tractor, motor bus, or any self-propelled vehicle and
trailers or semi-trailers used upon the highways of the state in transportation
of property or passengers.
(E)
Private carrier-any person engaged in the transportation of passengers or its
property, but not as a common carrier or a contract carrier.
(F) Watercraft-any boat or craft, including a
vessel, used or capable of being used as a means of transport on
waters.
(3) Basic Application of Exemption.
(A) Railroad
Rolling Stock. Sales of railroad rolling stock are exempt provided that it is
used in transporting persons or property in interstate commerce. The sale of
flanged wheel equipment used to repair and maintain the railroad track used in
interstate commerce is also exempt. Railroad rolling stock for use solely in
intrastate commerce is not exempt.
(B) Aircraft. Sales of aircraft to common
carriers for storage or for use in interstate commerce are not subject to sales
tax.
(C) Pipeline Pumping
Equipment. Sales of machinery and equipment used to propel products by
pipelines engaged as common carriers are exempt. The exemption does not apply
to contract carriers or to private carriers. All other machinery and equipment
such as pipelines, connecting lines, communication equipment, monitoring
equipment, accessory equipment, such as fuel tanks to provide fuel for pumping
engines, and manifolds used to connect pumping equipment to the main lines are
subject to tax.
(D) Power Take-Off
Units. Equipment on motor vehicles used by common carriers which is exempt from
tax includes power take-off (PTO) units which are attached to the transmission
of the power unit of the vehicle and all materials and replacement parts for
the power take-off units.
(E)
Materials. Materials used by common carriers directly upon and for the
maintenance or repair of motor vehicles, watercraft, railroad rolling stock or
aircraft, which qualify for the exemption from tax include, but are not limited
to, grease, motor oil, gear oil and lube, water additives, antifreeze, fuel
additives, cleaners and paint for body work.
(F) Replacement Parts. Replacement parts used
by common carriers directly upon and for the maintenance or repair of motor
vehicles, watercraft, railroad rolling stock or aircraft, which qualify for the
exemption from tax include, but are not limited to, decals, permit pouches,
tarpaulins and tie-downs, wind deflectors, winter fronts, and radio repair
parts purchased for use on the vehicle.
(G) Barges. The purchase of barges used
primarily in the transportation of property or cargo on interstate waterways is
exempt from tax.
(H) Tools. Tools
and equipment purchased for use directly upon, and for the repair and
maintenance or manufacture of, motor vehicles, watercraft, railroad rolling
stock or aircraft engaged as common carriers of persons or property are not
subject to tax.
(4) Examples.
(A) A manufacturer registered as a
common carrier maintains a fleet of trucks to transport finished products to
various distribution centers throughout the United States. The manufacturer
advertises that it will transport goods belonging to others on return trips
from the distribution centers and advertises that service. The purchase of the
manufacturer's fleet of trucks and repair parts for the fleet are not
taxable.
(B) A manufacturer
maintains a fleet of trucks to transport finished products to various
distribution centers throughout the United States. The manufacturer also
negotiates with other companies to transport goods on return trips from the
distribution centers. The purchase of the manufacturer's fleet of trucks and
repair parts for the fleet are taxable because the manufacturer is not a common
carrier.
(C) A common carrier
purchases a cab and chassis. The cab and chassis are licensed for a gross
weight of 24,000 pounds and will be used only in intrastate commerce as a
common carrier. The purchase of the cab and chassis is not taxable. The common
carrier subsequently purchases a dump bed to add to the cab and chassis. The
dump bed is exempt from tax because it is materials or equipment used in the
manufacture of a motor vehicle to be used by a common carrier.
(D) The sale of a switch engine to be used to
move railroad cars around a switching yard, if part of an interstate rail
system, is not subject to tax.
(E)
A common carrier purchases a trailer. The common carrier subsequently purchases
a refrigeration unit to add to the trailer. The refrigeration unit is exempt
from tax because it is materials or equipment used in the manufacture of a
motor vehicle to be used by a common carrier.
(F) The sale of a switch engine to be used to
move railroad cars around a switching yard, if part of an interstate rail
system, is not subject to tax.
(G)
An airline purchases equipment to test engine parts that have been removed from
the plane and brought to their repair facility. The equipment purchased would
be exempt from tax.
(H) The owner
of a Missouri furniture store is registered as a common carrier, but does not
hold itself out to the general public as a common carrier. It uses its truck
only to deliver furniture sold to customers residing in and outside Missouri.
The owner installs new brakes on the truck. Even though the owner is registered
as a common carrier, the brakes are taxable because the furniture store is
operating as a private carrier.
(I)
A charter company contracts with private groups for exclusive use of its bus
and driver for transportation between Missouri and destinations in the
Southeastern United States. The company provides no other transportation
services. The charter company purchases new tires. The tires are taxable
because the business is a contract carrier.
(J) A railroad purchases a flanged wheel
mechanized tie replacement machine for repairing broken rail segments on an
interstate system. The purchase of the machine is exempt.
*Original authority: 144.030, RSMo 1939, amended 1941, 1943, 1945, 1949, 1961, 1965, 1967, 1969, 1977, 1979, 1980, 1982, 1983, 1985, 1986, 1988, 1989, 1991, 1994, 1995, 1996, 1997, 1998, 1999, 2003, 2004, 2005, 2007 and 144.270, RSMo 1939, amended 1941, 1943, 1945, 1947, 1955, 1961.
Disclaimer: These regulations may not be the most recent version. Missouri may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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