Click-Through Sales Tax Nexus in Missouri

As if online retailers weren’t concerned enough with the Marketplace Fairness Act of 2013 passed by the United States Senate (the bill has yet to pass in the House of Representatives), they now have to contend with individual states passing sales tax laws that impact their businesses.  Follow this link for a previous Anders’ Blog on the Marketplace Fairness Act:

Several states, Missouri included, have passed “click-through nexus” laws. These laws, which vary slightly by state, look to collect sales tax from online sales. In Missouri, the law works as follows.

A retailer selling cat and dog toys has a brick-and-mortar store in Florida, and it wants to increase sales by selling over the internet.  The retailer sets up a website, and decides that to generate traffic on its website, it will partner with other online websites.  The retailer places an ad on the website of the St. Louis Post Dispatch.  When a customer reaches the retailer’s website by clicking on the link at, the “click-through” is logged.  If the retailer makes a subsequent sale as a result of the click-through, the St. Louis Post Dispatch is paid a commission.  As a result of the “click-through nexus” law, Missouri looks to this relationship in determining if the out-of-state retailer has sales tax nexus in the state.

Missouri’s “click-through nexus” law, which is included in Senate Bill 23, amends the state’s definition of “engaged in business activity in this state.” According to the new statute, a vendor shall be presumed to engage in business activities within Missouri if the vendor enters in an agreement with one or more residents of this state under which the resident, for a commission or other consideration, directly or indirectly refers potential customers to the vendor by an Internet link or otherwise.  The law applies so long as the vendor realizes at least $10,000 in sales from such referrals.

The presumption may be rebutted by submitting proof that the affiliates were not engaged in activities that were significantly associated with the retailer’s ability to make or maintain a market for sales in the state.

The full impact of Missouri’s “click-through nexus” law is yet to be determined; however, Amazon has already canceled its “Amazon Associates” program in Missouri.  This program is for Missouri based websites that direct potential shoppers to Amazon.  Considering the volume of Amazon’s sales, these Missouri based websites directing traffic to would create sales tax Nexus in Missouri for Amazon.

Clearly, Amazon is working to circumvent the new law; however, how will it impact other retailers, including smaller retailers?  More importantly, how will it impact your business?  To learn more, contact an Ander’s tax advisor.