How do I collect sales tax legally?

How to Collect Sales Tax Legally in Missouri

Collecting sales tax in Missouri requires understanding state and local tax rules and following proper registration and reporting procedures. Below is an operational guide to help you comply with Missouri sales tax requirements.

Step 1: Register for a Missouri Sales Tax License

• Register with the Missouri Department of Revenue (DOR): Before collecting sales tax, obtain a sales tax license by registering your business online through the Missouri DOR website.
• Provide business details: You will need your federal EIN, business structure, and contact information.

Step 2: Understand What Sales Are Taxable

• Taxable goods and services: Most tangible personal property sales are taxable. Some services may be taxable depending on the nature of the service.
• Exemptions: Certain sales, such as some food items or manufacturing equipment, may be exempt. Keep proper documentation for exempt sales.

Step 3: Determine the Correct Sales Tax Rate

• State and local rates: Missouri has a state sales tax rate, plus additional local taxes that vary by city and county.
• Use tax rate lookup tools: Use Missouri DOR’s online tools to identify the correct combined tax rate for each sale based on the delivery location.

Step 4: Collect and Record Sales Tax

• Include sales tax in the transaction: Clearly show the sales tax amount on customer invoices or receipts.
• Maintain accurate records: Keep detailed records of taxable sales, exempt sales, and collected tax for compliance and reporting.

Step 5: File Sales Tax Returns and Remit Collected Tax

• Filing frequency: Missouri requires monthly, quarterly, or annual filings depending on your sales volume.
• File electronically: Submit sales tax returns and payments online through the Missouri DOR portal.
• Meet deadlines: File and pay on time to avoid penalties and interest.

Additional Operational Considerations

• Automation: Use accounting or point-of-sale software that integrates Missouri sales tax rates and automates tax calculation and reporting.
• Employee training: Train staff on sales tax collection procedures and exemption certificate handling.
• Audit readiness: Maintain organized records to support tax filings in case of a Missouri DOR audit.
• Remote sales: As of 2026, remote sellers with economic nexus in Missouri must collect sales tax. Monitor thresholds and register accordingly.