USA: Missouri adopts affiliate and click-through nexus standards for sales and use tax

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.

The takeaway

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.

About Jennifer Jensen

email: jennifer.jensen@us.pwc.com Mobile: +1 240 678 0226 Office: +1 202 414 1741

Jennifer is a state and local tax director in PwC Washington National Tax Services specializing in sales and use and indirect taxes. Her industry focus is in technology, entertainment, media, and communications. Jennifer helps lead the firm's cloud computing initiative and is the state and local subject matter expert in this area. Jennifer provides both internal firm and external client sales and use tax training in such issues as eCommerce, the taxation of digital products, and, of course, cloud computing. She also summarizes relevant legislation or other tax law changes to disseminate both externally and internally and writes thought leadership pieces for external publication by the firm.