Missouri Sales Tax Handbook

RATE OF SALES TAX:

4.225%

LOCAL & COUNTY MAXIMUM RATES:

5.625%

What are the taxable goods and services?

The first step in sales tax compliance is determining if the items or services your firm offers are taxable in Missouri.

Traditional Products and Services

Physical property, such as furniture, household appliances, and automobiles, is subject to sales tax in Missouri.

Prescription drugs and fuel are tax-free purchases.

Some Missouri services are subject to sales tax. View this table from the Missouri Department of Revenue’s website Digital Goods or Services for a complete list of taxable services.

A digital item or service is anything that is supplied electronically, such as a music downloaded from iTunes or a movie bought from Amazon.

Missouri does not compel companies to collect sales tax on digital items sold.

How to Register for Sales Tax in Missouri

If you have concluded that you must charge sales tax on part or all of the products and services that your company sells, the next step is to apply for a seller’s licence.

This enables your company to collect sales tax on behalf of the municipal and state governments.

You will need the following information to register:

Personal identifying information (SSN, address, etc.)
Identification information for a business (EIN, address, etc.)
Estimated monthly sales to Missouri purchasers Business entity

Businesses that sell taxable products or services in their state must first get a seller’s permit. If the company makes retail sales, a bond equivalent to three times the average monthly sales and use tax must be placed in order to apply for a seller’s permit. You may use this calculator to calculate the amount of your Missouri bond.

After two years of on-time payments, you may request that this bond be repaid.

A Resale Certificate might help you save money.

When acquiring items for resale, your firm does not have to pay sales tax if you obtain a resale certificate, also known as a reseller’s permit.

Sales Tax Collection

After obtaining your seller’s licence and starting your company, you’ll need to figure out how much sales tax to charge various consumers. It is critical for company owners to collect the right rate of sales tax to avoid penalties and the danger of expensive audits.

When computing sales tax, consider the following types of transactions:

Store Sales Shipping Within-State Sales Outside-State Sales

Retail Sales

For conventional company owners who sell products or services on-site, calculating sales tax is simple: all sales are taxed at the rate determined by the store’s location.

Here’s an illustration of how this situation may look:

In Branson, Missouri, Mary owns and operates a bookshop. Because books are taxable in Missouri, Mary charges her clients a flat 6.1% sales tax on all purchases. This includes the state sales tax rate of 4.225% in Missouri and the Taney county sales tax rate of 1.875%.

Sales inside the state

Missouri has what is known as an origin-based sales tax regime. This implies that long-distance purchases inside Missouri are taxed based on the seller’s address. This regulation applies to sales taxes levied by the state, county, and city.

Consider the following scenario:

Steve operates his own eBay electronics company from his home in Tarkio, Missouri. A buyer from Springfield, Missouri discovers Steve’s eBay website and buys a $350 set of headphones. Steve calculates the sales tax for this transaction using Missouri’s state tax rate of 4.225%, plus 2.25% for Atchinson County’s tax rate and Tarkio’s municipal tax rate of 2.0%. The total cost is $379.66 ($29.66 sales tax) at an 8.475% total sales tax rate.

Out-of-State Purchases

Missouri firms must only pay sales tax on out-of-state transactions if they have a presence in other states.

Nexus indicates that the company has a physical presence in another state.

Common nexus types include:

A physical place, such as an office, retail shop, or warehouse.
An employee who works from home or as a roaming sales representative.
An affiliate marketer
Dropshipping from a third-party vendor.
A temporary physical site, such as a festival or fair booth.

Submit Your Sales Tax Return

You’re ready to submit your sales tax return now that you’ve obtained your Missouri seller’s permit and understand how to charge the correct amount of sales tax to all of your customers. You avoid penalties and fines, be sure to meet all filing dates.

How to File a Claim

Businesses in Missouri are required to file sales tax forms and make sales tax payments online.

How Frequently Should You File?

The frequency with which you must submit is determined by the total amount of sales tax collected by your firm.

Annual filing: If your company collects less than $33.33 in sales tax each month, you should submit returns on an annual basis.
Quarterly filing: If your company receives between $33.33 and $500 in sales tax each month, you should choose to submit quarterly returns.
Monthly filing: If your company receives more than $500 in sales tax every month, you must submit returns on a monthly basis.

Deadlines for Filing

The deadline for all Missouri sales tax returns is the 20th of the month, unless it is a weekend or federal holiday, in which case the deadline is postponed to the following working day.

Penalties for Filing Late

Missouri assesses a late filing penalty of 5% every month or partial month, with a maximum penalty of 25% of the tax stated on the tax return.

Missouri also imposes a late payment penalty of 5% of the unpaid tax, even if the return has been submitted.

The state levies any unpaid tax or penalty at a compounding interest rate of 4% per year or 0.33% every month or partial month.