Missouri requires out-of-state businesses to register and comply with tax obligations when they establish sufficient nexus to the state through physical presence or economic activity. While nexus' pertains to tax obligations (sales, income, and employment taxes), businesses also have operational registration requirements with the Missouri Secretary of State.
The approach to nexus determination in Missouri follows both statutory requirements and administrative interpretations. The state has explicit thresholds for sales tax economic nexus ($100,000 in annual sales), factor-presence tests for income tax, and immediate triggers for employment tax obligations.
Missouri establishes sales tax nexus through economic activity thresholds and physical presence triggers. As the final state to adopt economic nexus legislation, Missouri's rules became effective January 1, 2023, following the Supreme Court's Wayfair decision.
Missouri requires remote sellers to collect sales tax when gross receipts from retail sales to Missouri customers exceed $100,000 in the previous or current 12-month period. This threshold applies to tangible personal property delivered into Missouri and excludes wholesale transactions with valid resale certificates.
The $100,000 threshold includes both taxable and nontaxable retail sales but only counts retail transactions, not wholesale sales to registered resellers. Missouri does not use a transaction count requirement, making it solely revenue-based. Businesses must monitor their sales quarterly and register within three months after the end of the quarter in which they exceed the threshold.
Physical presence creates immediate sales tax obligations regardless of sales volume. Activities that establish physical nexus include:
These activities create nexus from day one, making economic thresholds irrelevant.
Businesses meeting nexus requirements must register through Missouri's MyTax portal before collecting sales tax. The state assigns filing frequency based on tax volume – typically monthly for larger sellers and quarterly for smaller ones. Returns and payments are due by the 20th of the month following the collection period.
Missouri uses origin-based sourcing, meaning the tax rate depends on where the seller is located – a distinctive approach as most states use destination-based sourcing. The state provides online tools for determining the correct combined state and local tax rates for each sale.
Missouri imposes corporate income tax on entities "carrying on a trade or business in, or deriving income from sources within" the state. Income tax nexus operates independently of sales tax nexus and focuses on business activities rather than specific dollar thresholds.
Missouri considers various factors when determining income tax nexus:
Corporations with Missouri nexus must file Form MO-1120 and pay Missouri's 4% corporate income tax rate on Missouri-sourced income. Multi-state businesses use single sales factor apportionment to determine what portion of their income is subject to Missouri tax.
LLCs face different requirements based on their federal tax classification. Single-member LLCs are typically disregarded entities with income flowing through to the owner, while multi-member LLCs usually file as partnerships unless electing corporate treatment.
Employment tax nexus in Missouri is straightforward: having any employee work in Missouri creates immediate tax obligations, regardless of sales volume or other activity levels.
Any employee working from a Missouri location establishes employment tax nexus instantly:
Employment nexus requires registration with the Missouri Department of Revenue for income tax withholding. Employers must also register for unemployment insurance if they pay at least $1,500 in wages during a calendar quarter or employ one worker for 20 different weeks.
All employers must complete new-hire reporting within 20 days and maintain workers' compensation coverage as required by Missouri law. Registration must occur before paying the first Missouri employee to avoid penalties.
Missouri's tax rules apply to modern business activities, including digital products, SaaS offerings, and remote employee management.
Digital products and software-as-a-service subscriptions count toward Missouri's $100,000 sales tax threshold for economic nexus purposes. However, Missouri does not treat electronically delivered software and cloud-based services as taxable tangible personal property, so sales of these products and services are generally not subject to sales tax.
Remote employees working from Missouri locations create both employment tax nexus (immediate) and potential income tax nexus, depending on the level of activity and Missouri-sourced income. Companies must track where employees actually perform work, not just their official addresses.
Third-party marketplace sales don't count toward your personal economic nexus threshold if the platform is already collecting Missouri tax on your behalf. However, direct sales outside the marketplace still count toward the $100,000 threshold.
Affiliate marketing relationships or drop-shipping arrangements with Missouri-based partners can create physical presence nexus requiring immediate registration, separate from economic thresholds.
Crossing Missouri's tax nexus thresholds, particularly the $100,000 sales threshold or hiring employees, often signals that your business is "transacting business" in Missouri, which requires foreign entity registration with the Secretary of State.
While tax nexus and foreign registration operate under different legal standards, the activities that trigger tax obligations may also constitute "transacting business" for registration purposes.
Sales tax permits must be obtained promptly after economic nexus is established, with physical presence creating immediate obligations requiring registration before the first taxable sale.
Income tax registration typically occurs with the first return filing, while employment tax registration must happen before paying the first Missouri employee. Each tax type operates independently with separate registration processes through the MyTax Missouri portal.
Missouri expects detailed documentation supporting nexus determinations and tax calculations:
Missouri imposes penalties for late registration and non-compliance, with interest accruing from the original due date. The Department of Revenue assesses back taxes for periods when nexus existed but registration was missing.
The state offers voluntary disclosure programs that may limit lookback periods and reduce penalties for businesses proactively addressing past exposure. These programs provide an alternative to waiting for audit contact while potentially reducing overall exposure.
Discern streamlines Missouri’s compliance requirements by managing foreign registrations, providing registered agent services, and giving you real-time visibility into your compliance status across all jurisdictions where you operate.
Ready to streamline your Missouri compliance requirements? Try a Discern demo.
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