Missouri State Vendor Sales/Use Tax Compliance

Vendors Contracting with the State of Missouri Must Collect and Remit Sales/Use Tax

Any vendor and its affiliates selling tangible personal property to Missouri customers should collect and pay sales or use tax in order to be eligible to receive Missouri state contracts, regardless of whether that vendor or affiliate has nexus with Missouri.

Section 34.040.6 states, “The commissioner of administration and other agencies to which the state purchasing law applies shall not contract for goods or services with a vendor if the vendor or an affiliate of the vendor makes sales at retail of tangible personal property or for the purpose of storage, use, or consumption in this state but fails to collect and properly pay the tax as provided in chapter 144, RSMo. For purposes of this section, “affiliate of the vendor” shall mean any person or entity that is controlled by or is under common control with the vendor, whether through stock ownership or otherwise.”

Vendors Must Properly Register With The Department of Revenue

The Office of Administration (OA), Division of Purchasing and Materials Management will maintain a list of vendors in compliance with Section 34.040.6 RSMo. If you or your affiliate(s) sell tangible personal property in Missouri and are properly licensed to collect sales and/or use tax, your bid will comply with Section 34.040.6 RSMo without further action from you. However, if you or your affiliates sell tangible personal property in Missouri and are not properly licensed to collect sales and/or use tax, your bid will not comply with Section 34.040.6 RSMo. and you will not be awarded any contract with Missouri state government. You will have an opportunity to become a responsive bidder by following the below steps:

Step One - If you or your affiliate(s) sell tangible property in Missouri, register with the Department of Revenue to remit sales and/or use tax by completing a Missouri Tax Registration Application (Form 2643), online or by mail.

If you do not sell taxable tangible personal property at retail or provide taxable services in Missouri, you do not need to register for sales/use tax but you will need to follow step two below.

Step Two – If OA Vendor purchasing records indicate you are not currently in compliance with Section 34.040.6 RSMo, you can present a vendor no tax due certificate to purchasing authorities to verify that you have become compliant with Missouri sales and use tax law. Obtain a vendor no tax due certificate from the Missouri Department of Revenue by following the procedures outlined below.

If you do not sell taxable tangible personal property at retail or provide taxable services in Missouri, the department will provide a vendor no tax due certificate that you can present to Missouri purchasing authorities. The letter will verify that you are not required to register for sales and/or use tax because you do not make taxable sales in Missouri.

Once you are properly registered and provide a Vendor No Tax Due, OA's records will be updated to reflect you are in compliance with this law. As long as you and your affiliates are properly licensed and are filing and remitting sales and/or use tax you will remain on the in-compliance list. There may be a time lag between the time you present the Vendor No Tax Due and the time vendor files are updated, so you should maintain a copy of the certificate and present it with any bid documents for at least 45 days from the certificate's issuance date.

Please note all affiliate(s) of the vendor must be in compliance in order for the vendor to have the opportunity to bid on state purchasing contracts.

Obtaining a Vendor No Tax Due

The Missouri Department of Revenue will issue a Vendor No Tax Due when a business is properly registered and has all of its sales/use tax paid in full. If taxes are due, depending on the payment history of the business, a cashier's check or money order may be required for payment before a certificate of no tax due can be issued.

A Vendor No Tax Due can be obtained by contacting the Missouri Department of Revenue, Taxation Division, P.O. Box 3666, Jefferson City, MO 65105-3666. You may also call (573) 751-9268, fax (573) 522-1160, or email [email protected].

Sales and Use Tax

Sales tax is imposed on retail sales of tangible personal property and certain services. All sales of tangible personal property and taxable services are generally presumed taxable unless specifically exempted by law. Persons making retail sales collect the sales tax from the purchaser and remit the tax to the Department of Revenue. The state sales tax rate is 4.225%. Cities, counties and certain districts may also impose local sales taxes as well, so the amount of tax sellers collect from the purchaser depends on the combined state and local rate at the location of the seller. The state and local sales taxes are remitted together to the Department of Revenue. Once the seller remits sales tax to the department, the department then distributes the local sales taxes remitted by the sellers to the cities, counties and districts.

Use tax is imposed on the use, storage or consumption of tangible personal property shipped into Missouri from out of state. The state use tax rate is also imposed at a rate of 4.225%. In addition, cities and counties may impose local use tax. The amount of use tax paid on the transaction will depend on the combined local use tax rate in effect at the Missouri location to which the tangible personal property is shipped. Either the out-of-state seller will collect and remit the use tax directly to Missouri or the purchaser is responsible for remitting the tax to the department if the out-of-state seller does not collect use tax on the transaction. Local use taxes are distributed in the same manner as sales tax. Missouri cannot require out of state companies that do not have nexus or “direct connection” with the state to collect and remit use tax.

Any vendor and its affiliates selling tangible personal property to Missouri customers should collect and pay sales or use tax in order to be eligible to receive Missouri state contracts, regardless of whether that vendor or affiliate has nexus with Missouri.

Section 34.040.6 states, "The commissioner of administration and other agencies to which the state purchasing law applies shall not contract for goods or services with a vendor if the vendor or an affiliate of the vendor makes sales at retail of tangible personal property or for the purpose of storage, use, or consumption in this state but fails to collect and properly pay the tax as provided in chapter 144, RSMo. For purposes of this section, "affiliate of the vendor" shall mean any person or entity that is controlled by or is under common control with the vendor, whether through stock ownership or otherwise."

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