Missouri Senate Bill 823 was passed in June and takes effect August 28, 2016, changing the way retailers’ sales and use tax bond amount is calculated.
Under current law, Missouri retailers must purchase a surety bond that is three times their average monthly tax liability. After two years of satisfactory tax compliance, retailers no longer needed to hold a sales tax surety bond. Current law is in effect until August 28, so retail sales and use tax bonds purchased before that date should comply with current law. Retail sales and use tax bonds purchased after August 28 must be compliant with the new law.
After SB 823’s effective date, retailers’ sales and use tax bond must be two times their average monthly tax liability. Retailers can also become exempt from the surety bond requirement after just one year of tax compliance. The Director of the Missouri Department of Revenue can still increase a retailer’s surety bond amount at his or her discretion. New retailers should estimate their average monthly tax liability, and other retailers should base the amount on the previous 12-month period. The surety bond form will not change and is available online. The bond ensures retailers pay their taxes on time and in full. Estimate your surety bond amount with the DOR’s sales and use tax bond calculator.
Applicants for retail sales licenses and any licensees who are in default in filing a tax return and paying their taxes need a surety bond. Applicants must submit a completed tax registration application for their business, either online through the DOR or manually.
Contact the Department of Revenue with questions about tax registration for your business. The experts at SuretyBonds.com can help you get a sales and use tax bond in Missouri.