Print   Email   RSS

Sales Tax Obligations of Sellers in Missouri

April 13, 2006

	Visited: 135
	Not rated
	Rate: Select 1 - Terrible 2 - Poor 3 - Average 4 - Good 5 - Outstanding

Missouri imposes various requirements on sellers doing business in the state. We recommend that you go through the items below to help you with the most frequently asked questions concerning sellers and sales and use tax issues.

Procedure for accepting resale certificates. In Missouri you have the burden of proving that a sale was not subject to sales or use tax. You must obtain exemption certificates from your customers and keep them as proof. Each invoice or bill of sale must indicate your customer's name from whom the exemption certificate was obtained. In Missouri resale certificates may be obtained from the state. As an alternative, Missouri also accepts the multistate exemption certificate that includes the following information:

• your customer's name and address
• your name as the seller to whom it is given
• the reason for the exemption
• an authorized signature
• the purchaser's license or registration number
• the date
• the good faith of the purchaser

Procedure for accepting blanket certificates. You have the burden of proving that a sale was not subject to sales or use tax. As a seller, you may accept blanket certificates from a purchaser if the purchaser repeatedly purchases the same type of property or service from you for processing or resale. You must obtain exemption certificates from your customer and keep the certificates as proof. Each invoice or bill of sale must indicate the your customer from whom an exemption certificate was obtained. Only one exemption certificate needs to be obtained from each purchaser, provided the character of the purchaser's operation does not change and the purchases are claimed under that exemption certificate. However, you must update the exemption certificates every five years.

Sales and use tax liability for out-of-state mail order and catalogue retailers. Missouri has a statute that specifically taxes out-of-state mail order and catalogue sellers. However, you will be responsible for paying this tax only if you have physical presence within Missouri. To determine if you have physical presence, ask yourself the following:

• Do I have retail facilities, a warehouse, or any office space in Missouri? Maintaining retail or warehouse facilities will give you physical presence. Also, having an office for employees, even for business activities unrelated to mail order sales, will give you physical presence.
• Do my employees or I enter Missouri for purposes of taking and transmitting orders from Missouri? If your employee or independent contractor goes into Missouri to take or transmit orders, your business may have physical presence in Missouri. However, contracting with a common carrier to deliver mail order goods does not constitute physical presence.
• Do my delivery vehicles frequently enter Missouri for purposes of delivering property? Frequent deliveries in Missouri by your trucks will give you physical presence in Missouri.

Sales tax "bracket system." The bracket system may be followed by sellers in computing the sales tax. The 4.225 percent sales and use tax is computed on each dollar and/or fraction of a dollar according to the following table:

Absorbing the tax — using a "no sales tax" advertising strategy to drum up business. In Missouri it is against the law to refund or offer to refund all or any part of the amount collected, or to absorb the amount of sales tax required to be added to the sales price and collected from the purchaser. As a seller, it is also against the law for you to advertise directly or indirectly that you will absorb the sales tax that is required to be added to the sales price.

Claiming refund for excess tax payments. If you included the refunded amounts in a sales tax return you may deduct the refunded amount from the gross receipts required to be stated in your next sales tax return. However, you must return to the purchaser any sales tax paid by the purchaser. If a credit can't be taken on the next filed sales tax return, you can apply for credit from the Department of Revenue. Before a refund will be made, you must show that arrangements have been made for the return of taxes paid by purchasers. Claims for refund must be filed within three years from the date of overpayment.

 Feedback   Mail To A Friend   Submit Article   Add To Favorites