MO

When To Collect Sales Tax in Missouri

by Mark Faggiano

Missouri Sales Tax

This blog post may now be out of date. For our most up-to-date info on Missouri sales tax, check out our “Missouri Sales Tax Guide for Businesses.”

If you’re an online seller with actual or potential sales tax ties to Missouri, then you’re in the right place!

In this post I’ll take you through the most common scenarios we see with our customers trying to do the right thing when it comes to sales tax.

Hopefully this will give you a better idea of when you’re required to collect sales tax in Missouri and how much to collect. If you and your business don’t fit into any of the following scenarios, your best option to is contact a tax professional to get some guidance.

Online sellers with zero ties to Missouri
If you make a living selling items online and you live and operate your business in a state other than Missouri AND have zero ties to Missouri (no inventory, no employees, no facilities, etc) then you’re not required to collect sales tax on items shipped to Missouri.

Online sellers living in Missouri
If you live in Missouri then most likely you also operate your business in the state as well. If that’s true then you have nexus in Missouri (here’s an entire post about sales tax and nexus). That means you’re required to collect sales tax on taxable items delivered to customers in Missouri.

In order to collect sales tax you have to register your business with the state by submitting a Missouri Tax Registration Application (Form 2643) online. I’ll talk about how much sales tax to collect later in the post.

Out-of-state online sellers using a fulfillment service
Let’s say you live in Ohio (or any state other than Missouri) and you use a fulfillment service that warehouses and ships your inventory from a location in Missouri. According to Missouri, that inventory gives your business nexus to the state. That means you’re required to register your business with the state and collect sales tax on taxable items shipped to customers in Missouri.

Here’s the exact language used by the state in Chapter 144 that qualifies your inventory as a “place of business” in Missouri:

“Maintains a place of business in this state” includes maintaining, occupying, or using, permanently or temporarily, directly or indirectly, or through a subsidiary, or agent, by whatever name called, an office, place of distribution, sales or sample room or place, warehouse or storage place, or other place of business.

Collecting sales tax in Missouri

The sales tax rate you’ll use to charge your customers is a sum of the state rate (4.225 percent as I write this) plus any local tax that cities, counties, and districts may impose. The good news is the tax rate you charge your customers doesn’t change. Missouri’s tax rate is based on the origin of the sale (where your business is located).

For example, let’s say you live and operate your business in Windyville, MO. Windyville is located in Dallas County. The local rate in Dallas County is 2 percent. Add that to the state rate and the rate that you’re supposed to charge your customers in Missouri is 6.225 percent (PDF).  Any customer is Missouri gets charged that same rate.

Here’s a second example: let’s say you live in Charlotte, NC and use a fulfillment service that warehouses and ships your inventory from their location in Jefferson City, MO. Jefferson City is located in Cole County. The local rate in Cole County is 1.5 percent. There’s also a city tax of 2.0 percent that Jefferson City imposes. That means the tax rate you’re supposed to charge your customers in Missouri is 7.725 percent (4.225 state + 1.5 percent county + 2 percent city). Any customer is Missouri gets charged that same rate.

Filing sales tax in Missouri
If you need to file a sales tax return in Missouri, TaxJar has your back. You can now enroll in AutoFile for the state of Missouri and we’ll automatically file your sales tax return for you! Find out more at TaxJar.com.

Summary: if your business has nexus, collect based on your business location
If you’re an online seller, there are two common ways you’ll be required to collect sales tax in Missouri. The first is if you live and operate your business in the state. The second is if you have inventory warehoused and shipped from a location in the state. Collecting sales tax in Missouri is relatively straight-forward. You’re only required to use one rate to collect on every order shipped to a customer in the state. That rate is based on your business location. It will be the sum of the state rate plus any local rates (like county or city).

Are you currently registered as a seller in Missouri? Got any fun stories to share? Let’s talk in the discussion group below or head over to our sales tax community on Facebook.

  • Terry

    When you mention “local rate” are you referencing “mfg exempt rate” on the linked Missouri sales/use tax rate table?

    • Hi-

      By local rate I mean the city or county rate that usually gets added to the state rate. Those two together equal the total sales tax rate you’re required to collect.

  • Terry

    My Missouri sales tax form last year referenced the “use rate” for my city for required sales tax collection. No mention (to my recollection) about collecting state rate + local + city.

  • Larry

    Hi Mark, thanks for the post, but I’m still a little confused about when to collect sales tax for online sales. I have an online retail sales company that mainly sells to businesses that are located both in Missouri and out of state. If I understand it correctly, when I sell to a company that is out of state, I do NOT collect sales tax. But if they are in Missouri, I do collect sales tax. Is this correct?
    One other scenario is a customer whose buying location is in Missouri, but they have locations that are outside of the state which I ship products to. Should I be charging sales tax for this type customer?
    Thanks in advance for your help.

    • In general, yes, you would collect on sales in MO but not out of state. That changes if you have any sort of presence in another state that the other states deems nexus. Nexus can be caused by employees, salespeople, and inventory.

      Where else the customer has a presence isn’t relevant. You’re primary concern is the location to where you’re sending your items.

      If you have any doubts, you should contact a nexus specialist for a ruling.

  • Scott Sanders

    Thanks for the help Mark. What if the business and purchaser are located in MO but the item is shipped out of state as a gift to a third party by the business? Is MO sales tax still collected?

  • Audrey

    What if you work from home and sell intangible goods such as photos online?

    • Hi Audrey,

      It doesn’t matter if you work at home if you are selling taxable goods you should collect sales tax in states where you have nexus. That said, Missouri may not consider intangible goods like photos taxable. That depends on if they consider digital goods taxable or not. You can find that out with the Missouri DOR. (I wish we had a good rule of thumb but every state is different. Some tax digital goods, some don’t.) I hope this helps!

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  • Kathy

    I live in IL & want to sell crafts at a craft fair in MO. How do I handle sales tax?

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