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August 22, 2017

Are Missouri Delivery Charges Subject to Sales Tax?

Confusion over the taxability of delivery charges in Missouri is beginning to clear up. As of August 28, 2017, separately stated delivery charges are exempt from sales and use taxes.  Missouri Governor Eric Greitens signed Senate Bill No. 16, indicating that gross receipts should not include usual and customary delivery charges, and that delivery charges should be stated separately from the sale price.

Previous Treatment of Sales Tax on Delivery Charges

Prior to 2015, Missouri did not issue sales tax on delivery fees.  After the court ruling of Alberici Constructors Inc. v. Director of Revenue, the Missouri Department of Revenue notified business owners that if delivery was intended to be part of sale of a product, the charge would be subject to sales tax, even when separately stated.  This notice could cost thousands of dollars on a service that originally was not charged sales tax.

Taxable vs. Nontaxable

Starting August 28, 2017, Senate Bill No. 16 will take effect, resulting in “usual and customary delivery charges that are stated separately from sale price” to be exempt of sales and use tax charges.  If shipping charges are stated with sale price, and not separately stated, the charges will follow the taxability of the sale itself.

Learn more about the Senate Bill No. 16, or contact an Anders advisor to discuss whether delivery charges are subject to sales tax for your business.

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