by Karen Stern
A new law in Missouri is a long-overdue victory for many Missouri small-business owners.
Governor Parson recently signed Senate Bill (SB) 153 into law, making Missouri the last state that imposes sales tax to enact the economic nexus “Wayfair” legislation.
Effective January 1, 2023, this law allows Missouri and local jurisdictions to impose vendor’s use tax on sales made by out-of-state vendors. Vendors that have cumulated taxable receipts of at least $100,000 from the sale of tangible personal property (TPP) in the state in the previous 12-month period are required to collect and remit vendor’s use tax. This levels the playing field for Missouri brick and mortar businesses who are already subject to similar levels of taxation.
SB 153 was introduced in response to the 2018 U.S. Supreme Court case South Dakota v. Wayfair, Inc., in which the Supreme Court ruled in favor of states looking to impose a sales or use tax on remote sales. Since the 2018 case, all other states that collect sales tax have passed their own forms of legislation that establish an economic nexus on remote sales.
SB 153 also outlined other notable provisions meant to simplify Missouri’s sales/use tax rate structure. The first of which, Section 144.054, RSMo., was amended to provide a full exemption for items consumed in the manufacturing process, including from local sales tax. Another provision, Section 144.049, RSMo., repeals the ability for political subdivisions to opt out of the sales tax holidays in Missouri.
Businesses meeting this new economic threshold should consider prior year(s) risk before getting registered to collect and remit Missouri vendor’s use tax. If you have questions, contact Bernie Ottenlips, State and Local Tax at Armanino, at 314.687.2375 or Bernie.Ottenlips@armaninollp.com or Amy Jackson, State and Local Tax at Armanino, at 314.983.1336 or Amy.Jackson@armaninollp.com.
Karen Stern, CPA, (karen.stern@armaninoLLP.com), partner, Armanino, provides tax and accounting services for companies ranging from start-ups to $20 million in revenue. Prior to joining Armanino, Karen was a partner and practice leader for Brown Smith Wallace’s Entrepreneurial Services Group.