If I separately state my delivery charge on the invoice for concrete I sell and deliver in Missouri, do I have to charge sales or use tax on that delivery charge?

Plain-English summary

The Missouri Department of Revenue ruled that a ready-mix concrete company does not have to charge sales or use tax on its delivery charges, as long as those charges are usual and customary and are separately stated from the price of the concrete on the customer's invoice.

The company sells ready-mix concrete to commercial and residential customers and, when asked, delivers it to the job site using its own mixer trucks. It bills the concrete and the delivery as two distinct line items, and the delivery charge reflects only the cost of getting the concrete from the plant to the customer's site -- it is not folded into the price of the concrete itself.

Missouri law generally taxes gross receipts from selling tangible personal property, but the statutory definitions of "gross receipts" and "sales price" both specifically carve out usual and customary delivery charges that are stated separately from the sale price. Because the company's invoices clearly break out delivery from the price of the goods, and because the delivery charge is a routine, ordinary charge for transportation rather than disguised payment for the concrete, the Department concluded the delivery charge falls outside taxable gross receipts entirely.

What this means for you

Sellers who deliver their own goods

If you sell tangible personal property in Missouri and also deliver it, you can keep your delivery charge out of the sales/use tax base -- but only if two things are true: the charge must be usual and customary (a normal, ordinary transportation charge, not inflated or disguised price for the goods), and it must be separately stated on the invoice, not bundled into the price of the product.

Invoicing practices matter

The ruling turned heavily on the fact that the company's invoices "clearly distinguish between charge for the concrete and charge for delivery services." If your invoices lump a delivery fee into the total sale price, or don't break it out as its own line item, you risk losing this exclusion even if you conceptually treat delivery as a separate service.

Construction material suppliers and contractors

This is especially relevant for building-materials businesses like ready-mix concrete suppliers, where delivery by the seller's own trucks is routine. The same reasoning would apply to other tangible personal property sellers who deliver, not just concrete companies, since the statutes cited are general "gross receipts" and "sales price" definitions, not concrete-specific rules.

Common questions

Q: Do I have to separately state the delivery charge to get this exemption?
A: Yes. The ruling and the underlying statutes (Section 144.010(4) and Section 144.605(8), RSMo) both require the delivery charge to be stated separately from the sale price of the goods. If it's bundled into one total price, it isn't excluded.

Q: What does "usual and customary" mean?
A: The ruling doesn't define the phrase further, but it emphasizes that the delivery charge represented the actual cost of transporting the concrete and was "not bundled into or included in the sales process," i.e., not a disguised markup on the goods themselves.

Q: Does this same rule apply to use tax, not just sales tax?
A: Yes. The ruling notes that the same exemptions granted under the sales tax laws apply to the use tax laws (citing Section 144.615, RSMo), so a usual and customary, separately stated delivery charge is excluded from both.

Q: Can I rely on this ruling for my own business?
A: Not directly. This is a private letter ruling binding on the Department only with respect to the Applicant who requested it, only for three years from its date, and only so long as the facts don't change and the underlying law isn't changed by the legislature or courts. Other taxpayers can look to it for how the Department reasons about similar facts, but cannot rely on it as their own binding authority.

Q: Who has the burden of proving delivery charges are exempt?
A: The ruling notes that taxpayers bear the burden of demonstrating they qualify for any exemption, and that exemptions are strictly construed against the taxpayer, with any doubt resolved in favor of taxation, citing DI Supply I, LLC v. Director of Revenue, 601 S.W.3d 195 (Mo. banc 2020).

Citations and references

Statutes and rules:

• Section 144.020.1, RSMo (imposition of sales tax on retail sales of tangible personal property)
• Section 144.610.1, RSMo (imposition of use tax on storage, use, or consumption of tangible personal property)
• Section 144.615, RSMo (sales tax exemptions apply equally to use tax)
• Section 144.010(4), RSMo (gross receipts excludes usual and customary separately stated delivery charges)
• Section 144.605(8), RSMo (sales price excludes usual and customary separately stated delivery charges)
• Section 536.021.10, RSMo (Director of Revenue's authority to issue letter rulings)
• 12 CSR 10-1.020 (letter ruling procedure regulation)

Case law cited in the ruling:

• DI Supply I, LLC v. Director of Revenue, 601 S.W.3d 195, 196-97 (Mo. banc 2020) (taxpayer bears burden of proving exemption; exemptions strictly construed against taxpayer)

Source

• Landing page: Missouri DOR Rulings Search
• Ruling: LR 8387

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 February 10, 2026.

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

Applicant states that delivery charges for concrete delivery are separately stated from the purchase price for the concrete.  Applicant is a Missouri ready-mix concrete company engaged in the sale of ready-mix concrete to commercial and residential customers within the state of Missouri.  Applicant sells ready-mix concrete at a stated sales price, typically based on the quantity of concrete purchased.  Customers frequently request that the Applicant deliver the concrete to the job site using Applicant's mixer trucks. When delivery is requested, Applicant separately states the delivery charge on the customer invoice, apart from the charge for the concrete itself.  The delivery charge represents the cost of transporting the concrete from the Applicant's facility to the customer's designated location and is not bundled into or included in the sales process of the concrete.  Applicant's invoices clearly distinguish between charge for the concrete and charge for delivery services.  Delivery charge is a customary and usual charge for transportation services and does not represent consideration for the concrete itself.

ISSUE:

Are the separately stated delivery charges billed by Applicant subject to Missouri sales and use tax?

RESPONSE:

No. Separately stated delivery charges billed by Applicant are not subject to Missouri sales and use tax so long as the charges are customary and usual.

Section 144.020.1, RSMo, imposes a sales tax upon all sellers of tangible personal property in Missouri for the privilege of engaging in the business of selling tangible personal property within the state of Missouri.  Taxpayers bear the burden of demonstrating that they qualify for an exemption.  DI Supply I, LLC v. Director of Revenue, 601 S.W.3d 195, 196-97 (Mo. banc 2020).  "Exemptions from taxation are to be strictly construed against the taxpayer and any doubt is resolved in favor of application of the tax."  Id.   Section 144.610.1, RSMo, imposes a use tax on the privilege of storing, using or consuming within this state any article of tangible personal property in an amount equivalent to the percentage imposed by the sales tax.  For purposes of this analysis, the same exemptions granted by the sales tax laws apply to the use tax laws.  Compare Section 144.615, RSMo.

Section 144.010(4), RSMo, provides: "The term gross receipts shall not include usual and customary delivery charges that are stated separately from the sale price ...."   Section 144.605(8), RSMo, provides: "The sales price shall not include usual and customary delivery charges that are separately stated."

The separately stated delivery charges are not subject to tax as long as they are usual and customary.

This 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), or me.

Sincerely,

Trish Vincent