Missouri Sales Tax Economic Nexus

Missouri Becomes Last State To Tax Sales From Out-Of-State Sellers on January 1, 2023

On January 1, 2023, Missouri becomes the last state in the US to adopt an economic nexus law, meaning out-of-state sellers will have to collect and remit sales tax on shipments to consumers in the Show Me state.

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US states began enacting economic nexus laws following the June 2018 ruling by the US Supreme Court in South Dakota v. Wayfair, Inc, overturning the 1992 physical presence standard established by the High Court in Quill v. North Dakota.

By now, most online buyers have become accustomed to being charged sales tax from most online merchants and marketplaces.

Missouri residents have mostly been spared from paying sales tax when making online purchases from sellers outside the state, except when the online merchant or seller had a physical presence in the state.

But that changes at 12:01 am CST on January 1, 2023.

What Sellers Need to Know About the New Missouri Economic Nexus Law

Missouri Senate Bill 153 specifies that the threshold for economic nexus is $100,000 in cumulative gross receipts from taxable sales of tangible personal property delivered into the state during the previous or current calendar year.

For sellers that utilize online marketplaces such as eBay and Etsy, Missouri’s economic nexus law requires those sales to be included in the threshold calculation.

However, tax-exempt sales, typically wholesale sales that are not subject to sales tax, should not be included when calculating the threshold, according to the Missouri Department of Revenue.

Missouri’s new law also has a “marketplace facilitator” provision, which means most major online marketplaces like eBay, Etsy, Poshmark, and others will be adding the appropriate sales tax on orders going to a Missouri address (unless tax exempt).

In the initial weeks of 2023, Third-party sellers on online marketplaces should be prepared to receive some questions from Missouri buyers regarding this new law. The important message needs to be that this is a new state requirement, not under the seller’s or marketplace’s control.

With Missouri being the last hold-out among sales tax collecting states —Delaware, Montana, New Hampshire and Oregon have no statewide sales tax — residents in all other 46 states and the District of Columbia will now be paying sales tax on sales when purchasing from remote or out-of-state sellers, including on online marketplaces.

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