In 2018, the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. allowed states to adopt rules to collect sales and use taxes from businesses not physically located in their state but that sell and deliver products into the state. The Wayfair ruling replaced the requirement of physical presence for a state to compel a business selling their products into that state to collect sales taxes and file returns and remit to the state’s tax authority.
Where almost every state in the union with a general sales tax had enacted economic nexus legislation for remote sellers shortly after the Wayfair decision, states like Florida and Missouri took longer to impose sales tax with respect to sellers’ economic nexus in the state. On April 19, 2021, Florida finally joined the other 43 states and the District of Columbia to impose an economic nexus threshold and begin requiring out-of-state (remote) sellers to collect and remit sales taxes on items sold to the residents and businesses in the state. Now, Missouri has too.
More exactly, on June 30, 2021, Missouri’s Governor signed SB 153 & 97 into law, allowing Missouri and local jurisdictions to collect a use tax from online retailers who sell and deliver more than $100,000 in tangible goods to consumers in the state annually. While Missouri’s $100,000 nexus threshold is similar to the standard established by a number of states, it is important to note that, unlike many other states, Missouri’s economic nexus law does not have a minimum “number of sales” threshold for the compliance requirements to apply. Thus, once the taxable receipts threshold is achieved, retailers are expected to register to collect and remit tax immediately.
Collection and remittance obligations will begin on January 1, 2023. Sales and use taxes cannot be retroactive and will be collected by the Missouri Department of Revenue. Missouri will be the final state to implement an economic nexus law since the Supreme Court’s decision in 2018.
In addition, Missouri’s freshly minted law requires online marketplace facilitators to collect Missouri’s taxes on sales made through their sites beginning in 2023.
If there are additional comments or guidance on this matter, GBQ will provide updates as warranted. Please contact your GBQ representative if you have questions, or if you would like to discuss any of this information in further detail.
Article written by:
Matt Stamp, JD, LLM
Director of State & Local Tax Services