Missouri Rules That an Online Ordering Company for Restaurant Food Delivery is Not Required to Collect and Remit Tax

In a letter request dated July 17, 2024, the taxpayer, an online ordering company that allows customers to order meals and beverages from various restaurants through their website and mobile application, is asking the Missouri Department of Revenue (Department) if they are required to collect and remit sales tax as a Market Facilitator. In response dated August 30, 2024, the Department issued a two-part ruling.

In the first part, the Department addresses orders placed from in-state restaurants. The Department states that the taxpayer does not have to collect and remit sales tax on charges for food and beverage orders placed from in-state restaurants and delivered in-state. According to the Department, the restaurant is responsible for collecting and remitting sales tax as the delivery of the order does not involve the delivery of goods into the state under Section 144.752, RSMo. The state makes the distinction here between regarding the order being from a Missouri restaurant to a Missouri customer which means the goods are not delivered “into” the state (which implies origination outside the state), so therefore it is not subject to use tax but is subject to sales tax.

In the second part, the Department addressed whether the taxpayer is required to collect Missouri use tax as a Marketplace Facilitator on sales to Missouri customers that are delivered from out-of-state restaurants. Citing Section 144.752, RSMo, the Department ruled that the taxpayer is responsible for collecting and remitting use tax as a Marketplace Facilitator for orders placed from out-of-state restaurants, unless the customer placing the order picks up the food directly from the out-of-state restaurant.

This letter ruling highlights the differences between Missouri sales tax and use tax and the responsibilities of marketplace facilitators when considering the taxability of orders place from in-state and out-of-state restaurants. Missouri has rates that vary depending on the tax type with rates specific to sales tax, use tax, food sales tax, food use tax, and domestic utility rate. The rate for sales tax may be different than the rate for use tax in Missouri. The determination of which rate to collect is contingent upon the sourcing of sales tax in Missouri. (Letter Ruling LR 8316, Missouri Department of Revenue, August 30, 2024)

Posted on January 13, 2025