As an out-of-state roofing contractor who buys materials and rents equipment in Missouri and pays sales tax on them, but doesn't charge my customers sales tax, am I following Missouri law, and do I need a Missouri sales tax license?

Plain-English summary

The Missouri Department of Revenue ruled that a Texas-based commercial roofing contractor was already handling Missouri sales tax correctly on its jobs in the state. The contractor occasionally sends crews into Missouri to install roofs, buys roofing materials and pays Missouri sales tax to its suppliers, and pays Missouri sales tax to rental companies when it rents equipment locally -- but it does not charge its own customers sales tax on the job.

The Department confirmed this is correct because a construction contractor is treated as the final user and consumer of the materials and supplies it uses to complete a real property improvement, like a new roof. Under 12 CSR 10-112.010, that means the suppliers selling to the contractor owe tax on those sales -- not the contractor's customer, and not the contractor charging a separate sales tax line item. Sales tax exemptions are strictly construed against the taxpayer, so absent a specific exemption, the contractor should just pay tax on what it buys, which is exactly what it was doing.

The Department also confirmed the contractor does not need a Missouri sales tax license, because no Missouri law requires a purchaser of tangible personal property or taxable services to obtain a sales tax permit -- a license requirement generally applies to sellers, not buyers.

What this means for you

Roofing and other construction contractors

If you're a contractor who installs materials that become part of real property (like a roof), you are treated as the end user/consumer of those materials -- not a reseller. That means you pay sales tax when you buy materials and rent equipment, and you should NOT be separately charging your customer sales tax on the materials portion of the job. This ruling confirms that pattern is correct.

Out-of-state contractors doing occasional Missouri jobs

Working in Missouri only occasionally, and being based in another state (here, Texas), does not change the analysis. As long as you're buying materials and renting equipment from Missouri vendors and paying tax at the point of purchase, you're complying with Missouri sales tax law on those transactions.

Do you need a Missouri sales tax license?

No -- not for this fact pattern. A sales tax license/permit obligation in Missouri attaches to sellers making retail sales, not to a contractor merely purchasing materials and equipment as an end user. If you never make retail sales of tangible personal property in Missouri, you generally don't need to register for one on that basis alone.

Common questions

Q: Do roofing contractors charge their customers sales tax on materials in Missouri?
A: No. The contractor is the final consumer of the materials it installs, so tax is paid by the contractor to its supplier at the time of purchase. The contractor does not separately collect sales tax from its own customer for those materials.

Q: Does renting equipment in Missouri change anything?
A: No. The contractor pays Missouri sales tax to the equipment rental company just as it does to material suppliers -- it's still the end user/consumer of what it rents.

Q: Does an out-of-state contractor need a Missouri sales tax license just to do occasional jobs there?
A: Not based on this ruling. No provision of Missouri law requires a purchaser of tangible personal property or taxable services to obtain a sales tax permit, so simply buying/renting as a contractor doesn't trigger a licensing requirement.

Q: Can this contractor's competitors or other roofing companies rely on this ruling?
A: No. The ruling itself says it is binding on the Department only with respect to the Applicant who requested it, only for three years from its date, and only as long as the facts and the underlying law don't change. Other taxpayers can look to it for how the Department reasons about similar facts, but cannot rely on it directly for their own situation.

Q: What law does this rest on?
A: Section 144.020.1, RSMo, which imposes sales tax on sellers making retail sales of tangible personal property or taxable services, and 12 CSR 10-112.010, which makes a contractor the final user/consumer of materials incorporated into a completed real property improvement.

Citations and references

Statutes and regulations:

• Section 536.021.10, RSMo (letter ruling procedure under which the Director of Revenue issues this ruling)
• Section 144.020.1, RSMo (imposition of sales tax on retail sales of tangible personal property and taxable services)
• 12 CSR 10-112.010 (contractor is the final user/consumer of materials and supplies used in a construction contract)

Source

• Landing page: Missouri DOR Rulings Search
• Ruling: LR 8360

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 9, 2025.

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

Applicant is a Texas based commercial roofing company that occasionally does a project in Missouri.  When working in Missouri, Applicant brings its crews into the state to perform labor on roof installation.  It purchases roofing materials and pays its suppliers Missouri Sales Tax. When it rents equipment locally, it pays Missouri Sales Tax to the rental company. Applicant does not charge their customer's sales tax.

ISSUE 1:

Are Applicant's practices outlined above in compliance with Missouri Sales Tax Law?

RESPONSE 1:

Yes. The outlined practices are in compliance with Missouri Sales Tax Law.

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."

12 CSR 10-112.010 provides:

(1) In general, a contractor is the final user and consumer of the materials and supplies used and consumed in fulfilling a construction   contract and which become part of a completed real property improvement. Consequently, persons selling materials and supplies to a contractor are subject to tax on the gross receipts from all such sales because the purchase is not for resale as tangible personal property.

Sales of tangible personal property are subject to tax unless a specific exemption applies, and tax exemptions and exclusions are strictly construed against the taxpayer, with any doubt to be resolved in favor of the tax.

Since Applicant is a contractor, it should pay sales tax on property purchased.

ISSUE 2:

Does Applicant need to obtain a sales tax license?

RESPONSE 2:

No. Applicant does not need to obtain a sales tax license. No provision of Missouri law requires a purchaser of tangible personal property or taxable services to obtain a sales tax permit.

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 Senior Counsel Kent L. Brown, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.

Sincerely,

Trish Vincent