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Missouri – The Last State To Enact Economic Nexus Legislation



Missouri- The Last State To Enact Economic Nexus Legislation

The 2018 U.S. Supreme Court ruling in South Dakota v. Wayfair has changed the dynamic of sales tax in a number of ways. Where almost every state in the union has already enacted economic nexus legislation for remote sellers, states like Florida and Missouri have been late to the party to impose sales tax with respect to seller’s economic nexus in the state.  On April 19, 2021, Florida lawmakers finally joined the other 43 states to impose an economic nexus threshold, and now Missouri is also set to finally pass a similar law.

The Missouri legislature approved  S.B. 153 in a 102-42 vote, following some modifications in the bill. Missouri Rep. John Eggleston said, “We have to be fair to out-of-state businesses because that’s what the Supreme Court said, and we want to help our in-state businesses to better compete.” He also added, “After a lot of negotiation, I think we’re at a pretty good spot.”

It appears to be a good possibility that Gov. Mike Parson will sign the bill. Primarily, the bill includes the rules for economic nexus and marketplace facilitators in the state. The Bill lays out the rules for how Missouri will enforce economic nexus requirements starting January 1, 2023, making it the final state to join the list. So, while the law will likely be signed soon, the state seems willing to forego the additional revenue for yet another year with this delayed effective date.

Under the bill, the definition of “engaging in business activities within the state” now includes vendors that have cumulative gross receipts of at least $100,000 from the sale of tangible personal property in the state in the previous twelve-month period.  As such, vendors meeting that threshold will be soon (as of 1/1/2023) be required to register with the state and to collect and remit sales & use tax.

The bill also requires marketplace facilitators meeting the economic nexus thresholds to collect and remit tax starting from January 1, 2023. Also provided for in the law is a discount that can be given to marketplace facilitators for properly collecting and remitting use tax in a timely manner under current law.

Stay tuned for final confirmation on the signing of this bill! And as always, contact us at Miles Consulting for all your questions about Wayfair, economic nexus, marketplace facilitators and other state tax matters you may encounter!

Have a question? Contact Monika Miles, Miles Consulting Group.

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Monika Miles

Monika founded Miles Consulting Group which focuses on multi-state tax consulting, helping clients navigate state tax issues such as sales tax and income tax in interstate commerce, including e-commerce.

Prior to forming the firm, Monika worked for 12 years combined in Big 4 Public Accounting and private industry. Monika has provided such services as federal and state income/franchise tax compliance and consulting, sales/use tax consulting, audit support, and credits and incentives reviews. She has served clients in a variety of industries including manufacturing, technology, telecommunications, construction, utility, retail and financial institutions.

Monika graduated from the University of Texas at El Paso (UTEP) with a BBA in Accounting/Finance and has a Masters in Taxation from San Jose State University.

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