Cyber Monday prompts reminder of tax on out-of-state purchases

Monday, November 28, 2011 | 4:53 p.m. CST; updated 9:04 p.m. CST, Monday, November 28, 2011

COLUMBIA — If you plan to spend a bunch of money shopping online this Cyber Monday or throughout the holiday season, you might be subject to the state's tax on out-of-state purchases — known as a use tax — if you didn't pay the usual Missouri sales tax on those purchases.

The use tax applies to people who spend more than $2,000 on goods that meet the requirement. With the holiday shopping season under way, here's what you might want to know:

What is the individual consumer's use tax?

It's a tax on the use, storage or consumption of tangible goods in Missouri, according to this Missouri Department of Revenue Web page. The tax applies to purchases of merchandise from out-of-state sellers who don't collect state sales tax and to purchases from sellers not engaged in businesses. Individuals are exempt from the tax unless they spend more than $2,000 on this type of purchase in a given calendar year.

Ted Farnen, director of communications for the Missouri Department of Revenue, said he couldn't provide the total amount the state had collected on use tax for the past few years on deadline.

What kinds of purchases are subject to the tax?

  • Purchases made on the phone;
  • Online shopping;
  • Catalog purchases;
  • Magazine subscriptions;
  • Cross-border purchase of goods;
  • TV marketing purchases;
  • Computer software; and
  • Furniture and equipment purchased from out-of-state sellers.

Does Boone County or Columbia levy a use tax?

No. City voters have twice rejected proposed use taxes on city ballots. Boone County residents and businesses are required to pay only the state's 4.225 percent use tax if they make qualifying purchases. In 2010, several county officials said a use tax would generate millions of dollars and level the playing field between out-of-state retailers and local businesses. The county, however, has not asked voters to approve a use tax.

Does the state track who needs to pay the tax?

The state does not track individuals who are required to pay the tax.

"We depend on the consumer to remit what he or she is supposed to," Farnen said. The Missouri Department of Revenue does keep track of businesses that are required to pay the tax because businesses have standing accounts with the state.

Farnen said the department does provide information about the use tax to companies and others who help people prepare tax returns, but the department doesn't have the resources for a large advertising campaign explaining the tax.

How do you file if you have to pay the tax?

  • Make a list of purchases you made during the calendar year without paying Missouri sales tax or use tax.
  • Calculate how much you spent on those purchases.
  • Fill out the Individual Consumer's Use Tax Return form and mail it to the Missouri Department of Revenue, P.O. Box 840, Jefferson City, MO, 65105-0840.

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