The Final State – Missouri – Begins Economic Nexus Tax Collection on January 1, 2023

The Final State – Missouri – Begins Economic Nexus Tax Collection on January 1, 2023

December 14, 2022

Americo Rodriguez, MST

Effective January 1, 2023, Missouri requires the collection and remittance of sales & use tax based on economic nexus.

On June 30, 2021, following the passing of state Senate Bills 153 & 97, Missouri’s Governor Mike Parson signed the bill into law to become the final state to establish economic nexus provisions. Prior to the new law, sellers were only required to collect sales and use taxes when they had a physical presence in Missouri. States began enacting these laws following the Supreme Court’s landmark decision in South Dakota v. Wayfair Inc. (2018).

Missouri’s new law modifies the definition of “engaging in business activities within this state” to include vendors that have “cumulative gross receipts of at least $100,000 from the sale of tangible personal property for the purpose of storage, use, or consumption in this state in the previous twelve-month period.”

Vendors meeting such criteria shall be required to collect and remit the use tax as provided under current law. The act does not establish a minimum transaction threshold as has been the case in several other jurisdictions.

Businesses that have customers in Missouri must register as a seller in the state and charge, collect, and remit sales tax when they have met the $100,000 threshold in the current or previous year.

Marketplace Facilitator Provisions

Also included in this legislation and effective January 1, 2023, are marketplace facilitator provisions.

Marketplace facilitators—such as Amazon and eBay—will be required to register with the Department of Revenue to collect and remit use tax on sales delivered into the state by or on behalf of a marketplace seller.

These retail sales include those made directly by the marketplace facilitator as well as those made by marketplace sellers through their marketplace.

We Welcome Your Questions

The REDW State and Local Tax (SALT) team welcomes your questions on economic nexus provisions in the State of Missouri or any state. Expertly manage your overall tax exposure and strategy with REDW’s deep tax knowledge and resources. Contact REDW Principal James Ortiz.

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