Missouri Sales tax guide

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Missouri sales and use tax in a nutshell

Everyone has dealt with the sales tax at some point in their life. It is a tax levied on the final customer and charged by the seller at the point of sale. In its nature, it is a consumption tax. You can find the sales tax called the VAT – Value Added tax in other countries.

Companies have to report sales and use tax Missouri to the Missouri Department of Revenue (Missouri DOR). Once a company registers as a payer of sales tax in Missouri (MO), it must include the correct Missouri sales tax rates in its prices. The tax collected is reported to the Missouri DOR at the end of each taxation period.

Missouri is yet to establish rules of sales tax collection for remote sellers. We discuss this in detail below.

Sales tax for Missouri registration

Like in other states of the US, a company must become a registered sales taxpayer once it fulfils three criteria:

• It has a nexus in the state (please find more about this below);

• It receives revenue from selling taxable items in the state;

• Its customers pay the sales tax in the state.

Nexus in Missouri

Not only companies physically based in the state have to add the Missouri sales tax rate to their final prices. The obligation applies even to remote sellers who create a strong bond with the state, as described below. Here are the types of nexus in Missouri:

• Physical nexus. It is created when a business has staff, facilities, or other physical presence in the state.

When a company sells remotely:

• A remote seller must register for the sales tax permit once more than USD 100 000 of sales to Nevada are generated or 200 separate retail transactions are delivered to the state, as stated in the official documents of the Nevada Department of Taxation. However, even smaller retailers can begin including the Nevada sales tax rate in their prices by voluntarily registering as sales taxpayers.

• The economic nexus provision in Missouri comes into power on January 1, 2023. Currently, there’s no economic nexus in Missouri. From 2023, an economic nexus in the state will be created once a retailer’s sales exceed USD 100 000 in the last 12 months. Following that, the company will have to register at the Missouri DOR and start charging the Missouri state sales tax.

• Affiliate nexus. In some cases, having affiliates selling the company’s products in Missouri might create a nexus in the state. However, this type of nexus is dealt with on an individual basis during consultations with Missouri DOR.

• Click-through nexus. Exceeding USD 10 000 in gross receipts sales to residents in Missouri made via a referral link creates a sales tax nexus in the state.

Taxable items in Missouri

How much sales tax in Missouri you should collect and return depends not only on the applicable rate of the sales tax Missouri but also if all the items you sell are taxable. As a rule of thumb, in most states tangible personal property is taxable while services are tax-exempt. The same applies to Missouri, too.

However, there are some tax-exempt items as well as some taxable services.

Tax-exempt items are:

• drugs and medical equipment;
• newspapers and other publications;
• farming machinery and items;
• food;
• etc.

Among taxable services are amusement, entertainment and sporting events-related services, telecommunications, utilities, labor, etc.

Please keep in mind that some organizations are exempt from collecting the sales tax. Among them are government agencies and NVOs.

Missouri sales tax online registration

A sales tax permit in Missouri is issued once a company registers at the Missouri DOR. The registration is quick and easy. In Missouri, there is no payment required to receive the sales tax permit. There are two ways to register for Missouri tax sales: logging in via the online registration system or filling in a form and sending it to the Missouri DOR office. The latter takes more time. Tax experts at the Missouri DOR also provide consultations regarding other business taxes in the state.

What is the sales tax rate in Missouri?

Finding out how much is the sales tax in Missouri one should collect depends on where the company is selling its goods. There are differences in Missouri sales tax percentage because Missouri state sales tax rate consists of a base rate and local/municipality rates any has to add to its prices requires knowing the exact destination of the sale. This will allow companies to determine which local rate to add on top of the base rate.

The base sales tax rate in Missouri is 4.225 %, while the local sales tax rates Missouri sellers have to add range from 0 to 5.875 %. Depending on the place of residents of their customers, the maximum sales tax rate Missouri -selling companies have to pay goes up to 10.5 %.

The calculation of the applicable sales tax rate can get confusing. If you want to know what’s the sales tax in Missouri that you should charge, check our Sales Tax Calculator or contact the 1stopVAT team.

Deadlines

Like many states in the US, Missouri allows companies to file their sales tax monthly, quarterly, or yearly, depending on the organization’s size. The assigned filing frequency should be taken seriously – late reporting can result in fines.

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