Out-of-state registered taxpayers should collect and remit sales tax on sales that are drop shipped by suppliers within and outside of Missouri to Missouri customers. Missouri law provides that sales of tangible personal property are subject to sales tax if the title of the property transfers in Missouri. In the case of drop shipments, this title transfer occurs when an out-of-state seller delivers tangible personal property to a third party common carrier for delivery into the State. For transactions that are drop shipped from within Missouri to a Missouri customer, the local tax rates at the supplier’s (drop shipper) location should be applied. The local sales tax is determined by where a product is shipped from for a product sold by a taxpayer and the shipping of the product originates within Missouri. The Missouri supplier’s location is considered the place of business for determining the local sales tax. For transactions that are drop shipped from outside Missouri to a Missouri customer, the local use tax rates at the customer’s location should be applied. In this case, the local sales tax is determined by where title passes for the product (Letter Ruling No. LR6271, Missouri Department of Revenue, May 20, 2010).