The Missouri Department of Revenue(DOR), on September 24, 2026, issued Letter Ruling 8408 in response to an applicant’s request for a ruling concerning the application of the sales and use tax on the transfers of digital cosmetic game items and software subscriptions.
Background of the Case
Applicant is a Missouri-established company that operates an online peer-to-peer marketplace(P2P marketplace) for Counter-Strike digital cosmetic items and Steam, a digital distribution platform. Steam and Counter-Strike are both owned and operated by Valve Corporation.
Valve Corporation controls the online transaction system by which users purchase and sell digital cosmetic items. The Applicant doesn’t have at any time any sort of “custody” of the digital items. Applicant provides users with listing, search, offer, auction, checkout, transaction-status, dispute, and seller-payout interfaces. Stripe operates the Applicant’s payment processing part.
Applicant has the possibility to charge users with marketplace fees, and separately offers optional monthly, annual, and one-time access for online software features accessible through the website(of its platform) and an associated browser extension.
Customers could be located within the state, or elsewhere.
Department of Revenue
DOR had to respond to the applicant on the two principal questions.
The first question was:
“ Do the transfers of the digital cosmetic items to Missouri users constitute taxable sales or services, such that Applicants must act as a marketplace facilitator?”
In the first part of the answer, the DOR responded that under the sales and use tax framework in the state of Missouri, digitally stored information isn’t tangible personal property, and as such is exempt from the sales and use tax.
Additionally, the DOR explained that the Applicant doesn’t correspond to the current concept of the Marketplace Facilitator under the sales and use tax framework, as it doesn’t collect and transmit the payment to the marketplace sellers.
The second question was:
“Is Applicant’s paid software subscription service subject to Missouri sales or use tax, such that Applicant must abide by taxable measures and sourcing rules?”
The DOR responded that under the sales and use tax framework, digital service provided by the Applicant isn’t one of the enumerated taxable services, and as such is tax-exempt.
Relevance of the Letter Ruling
The DOR letter ruling is binding with respect to the Applicant for three years, from the date of its official publication, and is subject only to statutory changes or court decisions.