Sales Tax Guide for Missouri

What Is Taxable in Missouri?

In Missouri, tangible personal property is generally subject to sales tax. However, there are notable exemptions, such as prescription drugs, select groceries, certain medical devices, and certain agricultural equipment.

If your business sells taxable goods or services, it’s essential to collect and remit sales tax correctly. Furthermore, check if use taxes apply when purchasing out-of-state products.

Who Needs to Collect Sales Tax?

Businesses that need to collect sales tax in Missouri include:

• Retailers with a physical presence in Missouri
• Online sellers who meet the state’s economic nexus threshold
• Service providers offering taxable services

Missouri enforces an economic nexus threshold of $100,000 in sales annually. Exceeding this limit, even without a physical presence in Missouri, requires registration to collect sales tax. Failing to do so may result in penalties and back taxes, thus doola’s Bookkeeping service is ideal for staying compliant and avoiding legal issues. 

How to Register for a Sales Tax Permit in Missouri

Registering for a sales tax permit in Missouri involves:

1. Gathering required documents: EIN, business license, and business information.
2. Visiting the Missouri Department of Revenue website.
3. Completing the online application process.
4. Receiving your Missouri Sales Tax License to start collecting sales tax.

You must register before making taxable sales, as collecting tax without a permit is illegal. Access the Missouri Department of Revenue’s website to begin the application process. 

doola’s expert bookkeeping team is available to assist, ensuring you focus on business growth without bureaucratic hurdles. 

How to Calculate Sales Tax in Missouri

To accurately calculate sales tax, follow these steps:

Step 1:
Identify the correct sales tax rate based on both the business location and the customer’s location.

Step 2:
Collect the appropriate sales tax at the point of sale.

Step 3:
Maintain detailed records of all transactions.

Filing requirements in Missouri may be monthly, quarterly, or annually, depending on sales volume. Ensure timely filings to avoid penalties.

Account for varying tax rates across different counties or municipalities, as some areas have additional taxes affecting your calculations.

 How to File and Pay Sales Tax in Missouri

Understanding resale tax exemptions in Missouri is vital. Not all products or services qualify, so clarity on this is essential.

The filing process involves accessing the Missouri Department of Revenue’s online portal, reporting total and taxable sales, calculating amounts due, and completing payments using accepted methods.

Navigate these complexities with help from doola’s specialized Bookkeeping service. Our team guides you through procedures, aiding in leveraging Missouri sales tax exemptions and ensuring compliance.

Common Sales Tax Exemptions in Missouri

Sales tax exemptions in Missouri are available for:

• Purchases for resale (requires a resale certificate)
• Sales to certified non-profit organizations
• Certain manufacturing and agricultural equipment purchases

Claiming an exemption requires the correct use of exemption certificates and keeping precise records. Misuse could lead to audits and fines.

Remote Seller and Marketplace Sales Tax Rules in Missouri

For remote sellers and marketplaces such as Amazon, eBay, Shopify, and Etsy, specific rules apply in Missouri.

The economic nexus threshold is $100,000 in annual sales, compelling compliance with Missouri’s sales tax regulations for remote sellers exceeding this limit.

What Triggers a Sales Tax Audit

The Missouri Department of Revenue may audit businesses for numerous reasons, including; incomplete or incorrect sales tax filings, repeated late payments, sales discrepancies, and incorrect exemption certificate use.

Reduce audit risk by maintaining thorough sales, exemption, and tax payment records and conducting internal reviews to ensure accurate filings.

FAQs About Sales Tax in Missouri

Common Missouri sales tax questions include:

Are digital goods taxable in Missouri? 

Digital goods taxation varies; consult state guidelines for specifics.

Do out-of-state businesses need to collect Missouri sales tax? 

If surpassing the $100,000 economic threshold, yes.

What if I overcharge or undercharge sales tax? 

Refund customers or pay the state any differences. Accurate records can prevent issues.

Are services taxable in Missouri? 

While many services are not taxed, some services like repairs and installations are exceptions.

Stay Compliant With doola

Avoiding sales tax compliance headaches is possible with the right information and tools.

doola can offer guidance and tools for compliance, with financial solutions, tax guidance, and expert bookkeeping to support your business needs.