LR 8390
Taxability of Drop-Shipped Orders
April 23, 2026
Dear Applicant:
This is a letter ruling issued by the Director of Revenue under Section 536.021.10, RSMo, and Missouri Code of State Regulations 12 CSR 10-1.020, in response to your letter dated March 3, 2026.
The facts as presented in your letter ruling request are summarized as follows:
Applicant is a business located in Missouri. It has orders drop-shipped from Arkansas to its Customers.
For an order of products placed at Applicant's Missouri headquarters and drop-shipped from Arkansas to a Customer in Missouri, should Applicant collect and remit sales tax from its headquarters location?
RESPONSE:
Yes, Applicant should charge and remit sales tax from its headquarters location.
Section 144.020.1 RSMo. imposes a tax upon all sellers for the privilege of engaging in the business of selling tangible personal property within the state of Missouri.
12 CSR 10-117.100(3)(A).1 provides: "All sales of tangible personal property subject to state sales tax in which the order is taken at a Missouri place of business are subject to the local sales tax in effect at that place of business."
Applicant takes orders at its Missouri location and then has the order drop shipped from a Vendor in Arkansas. Because the order is taken in Missouri, the applicable sales tax rate location is Applicant's place of business.
This letter ruling is binding upon the Department of Revenue with respect to the Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals. If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change. For this reason, the interpretation set forth above should be reviewed on a regular basis. Please note that any change in or deviation from the facts as presented will render this ruling inapplicable.
Should additional information be needed, please contact Senior Counsel Kent L. Brown, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.
Sincerely,
Trish Vincent