Missouri binding letter ruling leads to policy change for load and leave transactions - The SALT Group®

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		For Immediate Release December 16, 2004 Missouri – Binding Letter Ruling Leads to Policy Change for Load and Leave Transactions. The Missouri Department of Revenue has changed it policy on the sales and use tax treatment of computer software load and leave transactions based upon a binding letter ruling. “Load and leave” transactions occur when software is delivered to a purchaser by use of a tangible storage media where title to or ownership of the storage media is not transferred to the purchaser, but the right to use the product is transferred. A typical load and leave transaction is one where computer software is delivered in the form of a disk, CD, or some other tangible media, the software is installed on the purchaser’s computer, and the tangible media is returned to the seller. The letter ruling stated that a transfer of property qualified as being held for resale not only where title to it passed to another, but also where a transfer is made by which the right to use the property is passed to another for consideration. In essence, the term “sale at retail” has been expanded to include a load and leave transaction because the customer receives the right to use the software. The policy change applies when software is sold and delivered by means of tangible media, regardless if the purchaser installs the software and returns the tangible media to the seller, or if the seller installs the software and leaves with the tangible media. Taxpayers should not rely on letter rulings or other opinions issued prior to this binding letter ruling (Ruling No. 1724) because opinions contrary to the change in policy have been withdrawn by the Department of Revenue. If you would like additional information on this topic or other related questions, please contact Randall Hildreth, Multi-State Senior Tax Manager at (404) 364-1863. E-mail rhildreth@thesaltgroup.com Back to Main News Page



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