Missouri DOR Determines Out-of-State Vendor Must Collect Sales Tax on Orders Drop Shipped in State

The Missouri Department of Revenue (DOR) Nov. 2 determined in a letter ruling that sales and use tax applies to third-party drop shipments to state customers arranged by Taxpayer, an out-of-state vendor. Taxpayer sold manufacturer’s products into the state, which were drop shipped directly from the manufacturer to customers in the state. Taxpayer didn’t have any physical nexus in Missouri, nor did its sales exceed $100,000. Taxpayer inquired whether it was exempt from collecting and remitting sales taxes. The DOR noted: 1) all of Taxpayer’s sales to Missouri customers were subject to Missouri sales tax; 2) title to the products ...