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Sales Tax Refund 2012

08.16.2012

New Missouri Law Streamlines Sales Tax Refund Process and Eases Burden on Sellers

Historically, obtaining a refund of Missouri sales and use taxes collected by a vendor was a cumbersome process that could potentially place a substantial burden on the seller.  If a purchaser believed they overpaid Missouri sales or use tax to the seller, the purchaser had to request the seller to file a refund claim with the state.  Purchasers were not allowed to seek a refund from the state on their own behalf.  The purchaser had no recourse if a seller was unwilling or unable to file a claim or if the seller was out of business.  In addition, sellers who attempted to comply with the purchasers’ request had to amend returns and correspond with the state on the purchaser’s behalf, potentially causing a significant compliance burden for the seller.

On July 10, 2012, Governor Jay Nixon signed HB 1504 into law which will significantly impact this process.  This new law allows a purchaser to file a refund claim directly with the Missouri Department of Revenue (“DOR”) for taxes paid to a seller.  It allows the seller to assign the refund to the purchaser who can then file their refund directly with the DOR.  The DOR has not yet issued regulations on this new law.  The new law is effective August 28, 2012.

A claim for refund filed by the purchaser must include the following:

  • A notarized statement by the seller
  • Seller’s Missouri registration number
  • Transaction listing
  • The location where the sale was reported to the DOR

If the seller refuses to provide the assignment of rights or the seller cannot be located by the purchaser, the purchaser may provide the DOR with a notarized statement confirming the efforts made to contact the seller along with the items listed above.

Once the DOR receives the claim, it must notify the seller of the refund claim filed.  The seller will then have 30 days to object or agree to the refund.  If the seller objects, the DOR will deny the claim.  If the seller agrees or fails to respond, the DOR may issue the refund.

In the event that a claim filed by the purchaser is denied, the purchaser may appeal the denial within 60 days to the Missouri Administrative Hearing Commission.

Brown Smith Wallace has a skilled team versed in Missouri tax rules.  Contact Amy Jackson, JD at AJackson@bswllc.com to learn how this new legislation may benefit your business.

Team

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