On July 31, 2023, Missouri released Private Letter Ruling No. LR 8263. The ruling provides insight into the obligations of a California-based 501(c)(3) not-for-profit organization that operates as a marketplace facilitator regarding the collection and remittance of sales and use taxes. Although marketplace facilitators are required to collect and remit sales and use taxes in Missouri, these taxes might not apply to 501(c)(3) organizations when selling to other 501(c)(3) organizations.
In this case, the taxpayer’s role as a marketplace facilitator is solely dedicated to serving similar 501(c)(3) nonprofit organizations. Accordingly, since the transactions are occurring between only 501(c)(3) organizations, the taxpayer is granted a clear exemption from sales and use tax. However, if the taxpayer begins facilitating sales for taxable organizations, it will be responsible for collecting and remitting sales or use tax.
An additional notable outcome of this ruling is that, since the taxpayer is exempt from collecting and remitting tax to the state of Missouri, it is not required to register with the Missouri Department of Revenue as a marketplace facilitator.
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Genesis Clay, tax intern, contributed to this article.
