What Is Exempt from Sales Tax in Missouri?
Certain services and goods are excluded from Missouri sales tax to foster essential industries and services. One IBC USA helps businesses, both retailers and service establishments, navigate these exemptions to enhance cost-effectiveness and maintain full compliance with Missouri's taxation laws.
Exemptions in Missouri:
- Basics & Utilities: Certain utilities are exempt only when used in manufacturing, agriculture, or specific qualifying activities. Residential utilities may still be taxable depending on local jurisdiction.
- Medical & Livestock Supplies: Exempted are prescription medicines and medical devices. Veterinary vaccines and medicines applied to livestock used in the process of making food are also exempted.
- Manufacturing & Agricultural Inputs: Equipment, machinery, chemicals, and raw materials for manufacturing, processing, R&D, agricultural biotech, or plant genetics are exempt under state law.
- Export Transactions: Sales upon which title to goods passes outside Missouri are exempt from sales tax to promote export business activities.
- Online Services & Software: Internet access charges are exempt under federal law. Most construction labor services are not taxable, though materials used in construction remain taxable. Digital products or software may be taxable depending on their form of delivery.
- Back-to-School Tax Holiday: Missouri also has a tax holiday in which qualifying items like clothing with a limited amount, school supplies, and qualifying technology are exempt from taxation—generally around the start of the school year.
Understanding what is exempt from sales tax in Missouri spares businesses and consumers unnecessary expenses. One IBC USA guides clients through the exemption criteria of Missouri and ensures all qualified purchases or transactions are properly recorded and documented to be in full compliance.
