On July 5, 2013, Missouri enacted S.B. 23 which provides affiliate and click-through nexus standards for sales and use tax purposes.
Out-of-state vendors selling taxable products or services to Missouri customers should review whether activities of in-state affiliates or third parties create a sales and use tax registration and filing obligation with the state. This is relevant also for ecommerce vendors.
New affiliate and click-through provisions
Effective August 28, 2013, S.B 23 creates two new presumptions that a vendor is engaged in business in Missouri. A vendor is presumed to engage in Missouri business activities if any person, other than a common carrier acting in its capacity as such, that has substantial nexus with the state:
- sells a similar line of products as the vendor as does so under the same or similar business name
- maintains a Missouri office, distribution facility, warehouse, storage place, or similar place of business
- delivers, installs, assembles, or performs maintenance services in Missouri for its customers
facilitates delivery of the vendor’s property; or
conducts any other activities in Missouri that are significantly associated with the vendor’s ability to establish and maintain a market in the state.
A second presumption is created, which is generally referred to as “click-through” nexus. A vendor is presumed to engage in Missouri business activities if the vendor enters into an agreement with a Missouri resident to refer customers to the vendor and the sales generated by this agreement exceed $10,000 in the preceding twelve months.
With S.B. 23, Missouri joins an increasing number of states enacting affiliate and click-through nexus legislation. Retailers may continue to experience uncertainty and aggressive state scrutiny as states find new methods of taxing out-of-state retailers. Vendors should review activities of in-state affiliate and third parties to determine if sales and use tax registration and filing is required in Missouri. For more information, please click here.