Missouri – Senate Approves SST Agreement and Tax Amnesty

SALT Report 2480 – The Missouri Senate passed a Bill that, if approved by the Governor, would require the Department of Revenue to enter into the Streamlined Sales and Use Tax Agreement. The bill also provides a tax amnesty which would take effect immediately upon the Governor’s signature.

Streamlined Sales and Use Tax Agreement

The Department of Revenue would be required to enter into the SST Agreement, effective January 1, 2015 and makes the following SST compliance changes:

  • Cities that impose sales taxes would be required to notify the Department within 10 days of changing their boundaries. Any sales tax changes due to a boundary change would take effect on the first day of the calendar quarter 120 days after the Department receives notice of the change,
  • When a political subdivision changes its local sales tax rate or taxing boundary, these changes would take effect on the first day of the calendar quarter 120 days after the Department receives notice of the change,
  • All state and local sales taxes would be required to have the same bases by requiring identical exemptions at the state and local level,
  • Uniform sourcing rules would be required,
  • Political subdivisions would be prohibited from opting out of sales tax holidays,
  • The Department would be required to participate in an online registration system for sales tax collection. Registration in the system could not be used as a factor when determining nexus with the state,
  • The Department would be required to accept electronic payments,
  • The Department would be required to provide electronic databases for taxing jurisdiction boundary changes, tax rates, and a taxability matrix detailing taxable property and services. Sellers would be relieved from liability if they fail to properly collect tax based upon certain information provided by the department,
  • A collection allowance would be provided to sellers and certified service providers for collecting and remitting state and local taxes that is equal to 2% of the taxes collected, and
  • If products are bundled, with one item being taxable and the other nontaxable, the entire product would be subject to tax unless the provider could properly identify the nontaxable portion. For products that are bundled items with different tax rates, the highest tax rate would be used for the entire purchase unless the provider could properly identify the lower-taxed item.

Tax Amnesty

The Bill provides an amnesty from the assessment or payment of penalties, additions to tax, and interest that would normally be imposed on unpaid taxes that were due as of December 31, 2012. Taxpayers requesting amnesty would be required to submit a written application, file a tax return for each tax period for which amnesty is requested, pay all unpaid taxes in full by October 31, 2013, and agree to comply with state tax laws for the eight years following the date of the amnesty agreement.

The amnesty would not granted to any taxpayer who is part of a criminal investigation or part of any civil or criminal litigation pending in a U.S. or Missouri court for nonpayment, delinquency, or fraud related to any tax imposed by the state.

The provisions in House Bill 253 are part of the state’s Broad-Based Tax Relief Act of 2013. In addition to the provisions discussed, the Bill would reduce the tax on corporate business income as well as the business income for sole proprietors, partners, and shareholders in S-corporations and also provides click-through and affiliate nexus provisions.

For Further Information

Missouri House of Representatives – House Bill 253