Sales and Use Taxes in Missouri

April 13, 2006

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In Missouri sales tax is levied on all sellers for the privilege of engaging in the business of selling tangible personal property or rendering taxable services at retail. The sales tax is imposed on the following sales or charges (including lease or rental considerations):

tangible personal property
admission to places of amusement, recreation, games and athletic events
basic rate paid or charged for electricity, water and gas
basic rate paid or charged for telephone services and telegraph transmissions
rooms, meals, and drinks from places regularly offering such to the public
intrastate tickets for railroads, sleeping, dining and express cars, boats, airplanes, and buses and trucks licensed by the Department of Economic Development engaged in transportation of persons
renting or leasing tangible personal property, unless the lessor or renter paid the tax when purchasing the property

Sales and use tax rate. The Missouri sales and use tax rate is 4.225 percent (4.125 percent effective 11/8/08). (In addition, make sure you contact your local governments in Missouri because they are allowed to assess a local sales and use tax.)

Tax-exempt items. Missouri has many specific items that are exempt from sales tax — for example, certain prescription medications are exempt from Missouri sales tax. You'll want to check and see if you are exempt from the sales tax.

Responsibility for paying sales tax. In Missouri sellers are subject to and are primarily responsible for collecting and remitting the sales tax. However, purchasers must pay the amount of sales tax to the sellers.

Use tax. A compensating use tax is imposed for the privilege of storing, using, or consuming within Missouri any article of tangible personal property. Use tax is not imposed on receipts that were subject to sales tax or on sales that would be exempt from the sales tax if made in Missouri.

Responsibility for collecting use tax. The liability for the use tax is imposed on persons storing, using, or consuming tangible personal property in the state.

Obtaining tax permits in Missouri. In Missouri every person required to collect the sales tax must obtain a license from the Missouri Director of Revenue. There is no charge for the sales tax license.

Leases. In Missouri the lease or rental of tangible personal property is subject to sales tax. However, no tax is imposed if the lessor or renter paid sales tax when the property was purchased or if the sale of the property would be exempt from sales and use taxes.

The following discussions address additional sales and use tax issues that many small business owners face: