LR1409

RE:  Fees for Use of Internet Site

February 3, 2003

Dear Applicant: 

This is a letter ruling issued by the Director of Revenue pursuant to Section 536.021.10, RSMo 2000, and Administrative Regulation 12 CSR 10-1.020 in response to your letter dated January 10, 2003.

The facts you presented are summarized as follows:

Applicant owns and operates a web site.  Applicant provides a self-service online legal form system from which Applicant’s customers develop and purchase customized legal forms.  The forms are developed through a questionnaire that the customers complete online.  Applicant’s system then creates the legal form based on the responses to the questionnaire.  The customer has two options in obtaining the form.  The customer can view and save the document to their PC hard drive or the customer may request that the document be e-mailed.  The customer does not receive a hard copy of the form from Applicant but only obtains the document electronically.

ISSUE:

Are Applicant’s gross receipts from fees charged for use of the Internet site to create legal documents subject to Missouri sales or use taxes?

RESPONSE:

Applicant’s gross receipts from fees charged for use of the Internet site to create legal documents are not subject to Missouri sales or use taxes.

Section 144.020, RSMo, imposes a tax on the gross receipts of all sellers for the privilege of engaging in the business of selling tangible personal property or rendering taxable service at retail in this state.  In addition, Missouri law does provide a sales tax on the amount charged for the lease of tangible personal property.

Based on the facts submitted by Applicant, Applicant is not engaged in the sale of tangible personal property.  Furthermore, Missouri has not imposed a sales tax upon the type of service Applicant provides.  Applicant, based on the facts submitted, does not lease any tangible personal property to its customers.  Therefore, receipts generated from the fees Applicant charges its customers are not subject to Missouri sales or use tax.

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  If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change.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 feel free to contact James L. Spradlin, Office of General Counsel, Post Office Box 475, Jefferson City, Missouri 65105-0475 (Phone 573-751-0961), or me.

Sincerely,

Carol Russell Fischer

CRF:PJC:JLS:psf

LR1409