Missouri Sales Tax Ruling: Marketplace Facilitator Rules for Food & Beverage Sales

US sales and use tax rules and regulations are complex and sometimes confusing to taxable persons outside the US and local businesses and individuals subject to these indirect taxes. Due to various laws and regulations, which may seem imprecise or subject to different interpretations, US taxpayers often request official rulings or opinions on relevant provisions from the Department of Revenue.

One of those cases occurred in Missouri, where the Missouri Department of Revenue (MDOR) issued an official ruling letter related to the questions raised by an online ordering company.

Facts of the Matter and Ruling

The online ordering company (the Company) that requested a ruling from the MDOR connects customers with restaurants through its website and mobile app. The customers use the website and the app to order meals and drinks from restaurants in the State of Missouri.

To avoid breaking marketplace facilitator rules, the company wanted to know that they must collect and pay sales tax in Missouri as a marketplace facilitator related to sales of food and beverages from in-state restaurants.

After considering all the case facts, the MDOR concluded that the Company is not responsible for collecting and remitting the sales tax as a marketplace facilitator. Due to how the Company operates, local restaurants providing the final meal preparation service are subject to sales and use tax, and they must collect and remit it.

The only case the Company must collect and remit use tax, not sales tax, as a marketplace facilitator is when out-of-state restaurants deliver meals to Missouri residents.

Conclusion

The State of Missouri is one of the US states with rather specific marketplace facilitator rules, and it should not come as a surprise if more requests like this are sent to MDOR. However, the case presented clarifies which situation sales and use tax apply to in-state and out-of-state deliveries of foods and drinks.

Source: Deloitte, Missouri Department of Revenue