Missouri DOR Clarifies Sales Taxability of Contractor Home Addition Purchase

The Missouri Department of Revenue (DOR), in a letter ruling, determined that contractors who purchase materials to construct real property additions are considered the final users and consumers of those materials and, therefore, must pay sales tax on the materials at the time of purchase. The ruling further clarified that contractors should not charge sales tax on the lump-sum contract price for the real property addition, but they can factor the cost of sales tax on materials into the lump-sum price. [Mo. Dep’t of Revenue, LR8374, 11/24/25]

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