MO sales tax letters: delivery charges

MO sales tax letters: delivery charges
The Taxation Division of the Missouri Department of Revenue recently began to issue alerts to all Missouri taxpayers registered for sales tax collection, indicating they might have an obligation to charge and remit sales taxes on delivery charges that were previously thought to be exempt from taxation.

These notices are being generated pursuant to Senate Bill 18, which was passed in 2015. This bill now requires the Department of Revenue to notify taxpayers when a decision or order of the director of revenue, the administrative hearing commission, or the courts changes the Department’s interpretation or position on sales or use tax law.

delivery truckThe alerts being generated by the Department assert that delivery charges may be taxable if delivery is intended to be part of the sale. The Missouri Supreme Court ruled in Alberici Constructors, Inc. v. Director of Revenue, 452 S.W.3d 632 (Mo. banc 2015) that intention is a key factor; if delivery was intended to be part of the sale of personal property, the seller would be expected to collect and remit sales taxes on the delivery fee, even if the delivery fee is separately stated on the invoice.

Knowing how and when to assess sales and use taxes can a tricky chore for small business owners, which is why the Department is now required to issue these alerts. However, it’s important to note that the state’s new interpretation of the sales tax laws might or might not apply to your business. For help determining whether your delivery fees should be taxable or exempt, please contact your WK advisor at (573) 442-6171 or (573) 635-6196.

You are likely to get more of these letters in the future! As always, please let your WK advisor know if you are concerned about how they might apply to you.

CLICK-THROUGH NEXUS: HOW SELLING GOODS ONLINE CAN MAKE YOU LIABLE FOR SALES TAXES. Beware, all you online sellers: If you sell goods to buyers in other states, and you do so using companies that have “nexus” in those states, such as Ebay, Etsy or Amazon, you will be liable for collecting and remitting sales tax on those sales.
MISSOURI SUPREME COURT RULING IMPOSES SALES TAX ON FEES FOR LESSONS. The Missouri Supreme Court issued a decision on January 12, 2016, that might have major consequences for certain businesses whose sales of services have, thus far, been exempt from tax. In this particular case, the Supreme Court ruled against the taxpayer, a dance school, stating that its sales of dance lessons constituted a taxable transaction because the lessons provided more than an insubstantial amount of amusement or entertainment.
MISSOURI TAX CUTS TO TAKE EFFECT IN 2017. Missouri tax cuts passed by the state legislature in 2014 will begin to take effect in the upcoming 2017 tax year.

Posted By Katie Barthel, CPA on 8-24-2016 | Topics: Client Alerts, Newsletters, Perspectives,

Our thoughts and prayers are with all of our clients, friends and the communities across the state of Missouri impacted by the storms, tornadoes and flooding that have hit our state.
Our collective resolve will carry us through the coming months as we work to restore what was lost.