For many businesses starting in Missouri, particularly those selling products or offering certain services, obtaining a Missouri Tax Identification Number is a requirement. This number, which is commonly referred to as a sales tax number, is a fundamental requirement for operating legally in the state. It’s used for various tax purposes, including sales tax collection and remittance.
The Missouri Tax Identification Number is obtained by submitting the Missouri Tax Registration Application. This is a joint application between the Missouri Department of Revenue and the Missouri Department of Labor and Industrial Relations to register businesses for sales tax and employee withholding taxes. This streamlined process allows you to fulfill multiple registration requirements in one application.
As you research this topic, you might come across various sources of information, some of which may seem confusing or contradictory. You may even encounter services offering to handle the registration process for a fee. However, it’s important to know that you can obtain your Missouri Tax Identification Number directly from the state without any additional costs.
A Missouri sales tax license can be obtained by registering through MyTaxMissouri or by mailing Form 2643.
See: Steps to Starting a Business in Missouri
Cost and Bond Requirement
While a sales tax license is free in the state of Missouri, it’s important to note that all businesses registering for a sales tax license must post a sales and use tax bond equal to three times their monthly sales and use tax liability.
The bond amount is estimated for new businesses. For established businesses, it’s based on the previous 12 months of operation. The Missouri Department of Revenue provides a sales/use tax bond calculator to help businesses determine the cost of their bond.
The good news is that this bond is refundable after two years of good payment history. This requirement helps ensure businesses comply with their tax obligations while providing a pathway to recover the bond amount for those with consistent compliance.
Processing Time
After submitting your application, you can expect to receive your Missouri sales tax license and state sales tax number within about 2 business days when registering online. If you choose to apply by mail, the process may take up to 2 weeks.
Filing Frequency and Due Dates
Once you have your sales tax license, it’s crucial to understand when and how often you need to file your sales tax returns. The Missouri Department of Revenue will determine your filing frequency based on your expected sales volume. Generally, businesses will be assigned one of three filing frequencies:
- Monthly: Usually for businesses collecting over $500 in sales tax each month
- Quarterly
- Annually
Regardless of your assigned frequency, filings are typically due on the 20th day of the month following the reporting period. If the 20th falls on a weekend or federal holiday, the due date moves to the next business day.
It’s important to note that even if your business had no sales during a reporting period, you’re still required to file a return indicating no sales.
Taxable Products and Services in Missouri
Understanding what products and services are taxable in Missouri is crucial for proper sales tax collection and remittance. Here’s a general overview:
Physical Products
Almost all physical products sold at retail in Missouri are taxable, with a few exceptions. Common examples of taxable items include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Some items that are typically tax-exempt include:
- Certain prescriptions and medical devices
- Machinery used in agriculture and manufacturing
Digital Products
Digital products are generally tax-exempt in Missouri.
Services
While most services aren’t taxable in Missouri, there are some exceptions. Taxable services include:
- Charges for rooms, meals, and drinks furnished at hotels, motels, etc.
- Places of amusement, entertainment or recreation, games, and athletic events
- Labor charges for fabricating a product that will be sold at retail
It’s always best to check with the Missouri Department of Revenue or a tax professional if you’re unsure about the taxability of your specific products or services.
Wholesale License (Resale Certificate)
If your business plans to purchase items for resale, you can do so without paying state sales tax. This shifts the tax liability from the wholesaler or distributor to the retailer, who will then charge sales tax to the end-user of the item.
To make tax-free purchases for resale, you’ll need to provide your vendors with a Missouri Sales Tax Exemption Certificate (also known as a resale certificate). This certificate requires your sales tax license number, so you’ll need to obtain your sales tax license before you can make tax-free purchases for resale.
For More Help
If you have more questions about registering for a Missouri Sales Tax Licence, reach out to the Missouri Department of Revenue or a local Missouri Small Business Development Center.