The Missouri Supreme Court held that a company’s sales of linens, mattresses, desks, garbage cans, and DVD players to a company operating a chain of hotels were not exempt from sales tax as sales for resale. The court rejected the furnishing company’s argument that the sales were exempt because the hotels built the cost of the furnishings into their nightly room rates. The court explained the sale-for-resale exemption applies only if there is a transfer of title or ownership for consideration. Hotel guests may have received the right to use the furnishings, like linens, mattresses, and desks, but they did not acquire title or ownership of those items.

The court acknowledged that prior cases suggested that mere use would be sufficient, and attributed that to the court’s prior “tangled analysis” conflating the sales tax and use tax definitions of “sale.” The court clarified that for purposes of the sale-for-resale exemption, one must look only to the sales tax definition of “sale,” and not the use tax definition.

DI Supply I, LLC v. Missouri Director of Revenue, No. SC97932 (Mo. Mar. 17, 2020) (en banc).