Does Missouri charge sales tax on waste removal or dumpster/roll-off container services?

Plain-English summary

The Missouri Department of Revenue ruled that a waste removal service provider does not need to collect Missouri sales tax on its charges for waste removal services.

Applicant provides waste removal services to residential and commercial customers: customers fill a roll-off container, and then pay Applicant to remove the waste. Section 144.020.1, RSMo, imposes sales tax on sellers of tangible personal property or on those rendering "taxable service" at retail. Missouri, however, only taxes services that are specifically listed (enumerated) by statute -- services are non-taxable by default unless the legislature has named them, which is the reverse of the rule for tangible goods, which are taxable by default unless specifically exempted.

Because waste removal is not one of Missouri's enumerated taxable services, Applicant does not need to collect sales tax on its charges for removing waste from roll-off containers.

What this means for you

Waste removal and dumpster/roll-off container businesses

If your business charges residential or commercial customers to remove waste from a roll-off container (or similar waste removal arrangement), this ruling indicates you do not need to collect Missouri sales tax on those service charges, because waste removal is not one of Missouri's enumerated taxable services under Section 144.020.1, RSMo.

Accountants and tax professionals

This ruling is a clean illustration of Missouri's general rule for services: unlike tangible personal property, which is taxable by default unless a specific exemption applies, services are non-taxable by default unless the legislature has specifically enumerated them as taxable. When advising a client on whether a service charge is subject to Missouri sales tax, check whether that service appears on Missouri's list of enumerated taxable services rather than assuming taxability.

Common questions

Q: Does Missouri require sales tax on dumpster rental or roll-off container waste removal charges?
A: Based on this ruling, no. Waste removal services -- where a customer fills a roll-off container and pays to have the waste removed -- are not one of Missouri's enumerated taxable services, so no sales tax collection is required on those charges.

Q: Why isn't waste removal taxed like a sale of tangible property would be?
A: Section 144.020.1, RSMo, taxes sellers of tangible personal property and providers of "taxable service" at retail, but only certain services are enumerated as taxable. Tangible goods are taxable by default unless exempted; services are the opposite -- non-taxable by default unless specifically enumerated. Because waste removal is not on that enumerated list, it isn't taxed.

Q: Can other Missouri waste removal companies rely on this ruling?
A: Not automatically. A Missouri letter ruling binds the Department only as to the requesting Applicant, only for three years from its date, and only so long as the facts and law remain unchanged. Another business should confirm its facts match those described here and consult a tax professional before relying on this result.

Citations and references

Statutes and regulations:

• Section 144.020.1, RSMo (sales tax on sellers of tangible personal property or providers of taxable services at retail)

Source

• Landing page: Missouri DOR Rulings Search
• Ruling: LR 8251

Original ruling text

Dear Applicant:

This is a letter ruling issued by the Director of Revenue under Section 536.021.10, RSMo, and Missouri Code of State Regulations 12 CSR 10-1.020, in response to your letter dated May 4, 2023.

The facts as presented in your letter ruling request are summarized as follows:

Applicant provides waste removal services to residential and commercial customers. The customers fill a roll off container then pay applicant to remove the waste.

ISSUE :

Does Applicant need to collect Missouri sales tax on their charges for waste removal services?

RESPONSE :

No. Applicant does not need to collect Missouri sales tax on their charges for waste removal services.

Section 144.020.1, RSMo, provides: "A tax is hereby levied and imposed [...] upon all sellers for the privilege of engaging in the business of selling tangible personal property or rendering taxable service at retail in this state."

Waste removal services are not one of the enumerated taxable services in Missouri. Therefore, Applicant does not need to collect Missouri sales tax on their charges for waste removal services.

This letter ruling is binding upon the Department of Revenue with respect to the Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals.  If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change.  For this reason, the interpretation set forth above should be reviewed on a regular basis.  Please note that any change in or deviation from the facts as presented will render this ruling inapplicable.

Should additional information be needed, please contact Legal Counsel J. Ross Shelton, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.

Sincerely,

Wayne Wallingford