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The Missouri Department of Revenue issued a Letter Ruling stating that the sales of an out-of-state business are subject to Missouri use tax because its activities established nexus with Missouri. The company is an out-of-state vendor that sells tangible personal property to customers and resellers within Missouri. The company’s activities within the state include:
1) holding seminars and meetings with resellers in Missouri to educate them about the taxpayer’s products so that the resellers can sell the products to customers in Missouri;
2) providing order forms at the seminars to the resellers to promote and sell its products at special discounted rates; and
3) compensating the resellers for making such sales to customers.
The above activities result in nexus with Missouri and requires the business to collect and remit use tax on the sales of its products. If the company’s sales to its resellers are for resale by its resellers, the company should obtain a signed resale certificate from its resellers and not collect use tax on such sales. Additional rules and regulations apply. (Letter Ruling No. LR5552, Missouri Department of Revenue)


In order for vendors to attain eligibility to contract with the State of Missouri, the vendor and its affiliates must collect and pay sales or use tax, regardless of whether they have nexus or not. Effective August 28, 2004, vendors and their affiliates who make sales at retail of tangible personal property or for the purpose of storage, use, or consumption to Missouri customers must collect and remit the appropriate sales and use taxes to in order to vie for any state contract. “Affiliate of the vendor” means any person or entity that is under control of the vendor, whether through stock ownership or otherwise. (House Bill 600, Section 34-040.6, effective as noted above.)



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