Sales Tax State Activity Update - January 2009

Having a "Gas", Electric, and Water at Missouri Nursing Homes

The Missouri Department of Revenue has issued a Letter Ruling exempting utilities used by skilled nursing facilities. On September 22, 2008 the operator of nursing facilities in Missouri requested guidance as to whether water, gas and electricity are exempt for its usage in its facilities.

Pursuant to a provision in section 144.030.2(23), water service, gas and electricity are exempt from the Missouri Sales and Use tax so long as the usage is for domestic use. As defined by the Department of Revenue “Domestic Use” is defined as portion of metered water service, electricity, electrical current, natural, artificial or propane gas, wood, coal or home heating oil, and in any city not within a county, metered or unmetered water service, which an individual occupant of a residential premises uses for non-business, noncommercial or nonindustrial purposes. Utility service through a single or master meter for residential apartments or condominiums, including service for common areas and facilities and vacant units, shall be deemed to be for domestic use. Each seller shall establish and maintain a system whereby individual purchases are determined as exempt or nonexempt . . . .

Domestic use therefore includes residential units of the nursing homes. And such purchases are exempt from state sales tax, however may be subject to certain local sales taxes.

This ruling may be viewed at the Missouri Department of Revenue.

(Letter Ruling No. LR5279, Missouri Department of Revenue, November 25, 2008)

---

Subscribe to CyberTax News and receive the latest indirect tax news, including rate changes, rule updates, compliance issues, and more, delivered directly to your email.

Email Address