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Missouri: Out-of-State Internet Retailer Must Collect Use Tax


The Missouri Department of Revenue ruled that an out-of-state company, selling "fragrance and other specialty items" into Missouri, must collect use tax

This company accepts online orders from Missouri customers, ships tangible personal property to the Missouri customers and is owned by a holding company that has retail stores in Missouri.

The company asked the following questions of the Missouri Department of Revenue:

  1. Should the company collect sales tax or vendor's use tax?
  2. What local use tax should they collect and remit?
  3. Do they need to file a use tax return, if they made no sales for the period?

And the Department Gave the following Answers:

Should the company collect sales tax or use tax?

According to 12 CSR 10-133.200(1), the Company is not required to collect sales tax because the purchase of the property does not happen in Missouri, but happens online with an out-of-state company. The Company has nexus in Missouri. According to RSMo 144.610.1, they must collect use tax, since their transactions give their customers "the privilege of storing, using or consuming" tangible personal property within the state. Therefore the Company must collect vendor's use tax.

What local use tax should they collect and remit?

The Department states that the company must collect local use tax "at the location where the product is first delivered in Missouri."

Do they need to file a use tax return, if they made no sales for the period?

According to 12 CSR 10-104.030(A), the company must file a vendor's use tax return, even if they have made "no sales for the tax period."

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Avalara Author
Will Frei
Avalara Author Will Frei
Will Frei covers sales tax news including best practices, legislation and sales tax technology. He is the Social Media Manager at Avalara.