Is Shipping Taxable in Missouri? Missouri Sales Tax Rules for Delivery, Setup, and Installation Charges
In Missouri, a dealer may elect to separately state charges for delivery, setup, and installation. These separately stated charges are generally not subject to tax because the dealer is performing a service. This article explains Missouri shipping sales tax rules and practical compliance considerations for ecommerce sellers.
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Is Shipping Taxable in Missouri?
In Missouri, a dealer may elect to separately state charges for delivery, setup, and installation. These separately stated charges are generally not subject to tax because the dealer is performing a service.
For ecommerce sellers, the key compliance point is invoice presentation. Delivery, setup, and installation charges should be clearly separated from the product price if the seller intends to treat them as non-taxable.
Source: Missouri Secretary of State, 12 CSR 10-103 https://www.sos.mo.gov/cmsimages/adrules/csr/current/12csr/12c10-103.pdf
General Rule: Separately Stated Delivery, Setup, and Installation Charges Are Non-Taxable
Missouri generally allows separately stated delivery, setup, and installation charges to be treated as non-taxable service charges.
For example:
Product price: USD 100 Delivery charge: USD 8 Total: USD 108
If the USD 8 charge is separately stated as a delivery charge and represents a delivery service, it is generally not subject to Missouri sales tax.
Setup and Installation Charges
Missouri’s rule also refers to setup and installation charges. If a seller charges separately for setting up or installing a product, those charges may also be treated as non-taxable service charges when separately stated.
For example:
Product price: USD 100 Delivery charge: USD 8 Setup charge: USD 15 Installation charge: USD 20 Total: USD 143
In this example, the separately stated delivery, setup, and installation charges are generally not subject to tax because they represent services performed by the dealer.
When Can Delivery Charges Become Taxable?
Delivery or service-related charges may create taxability risk if they are not separately stated or are bundled into the product price.
For example:
Product price, delivery included: USD 108
In this case, there is no separately stated delivery charge to exclude. The full USD 108 may be treated as the sales price of the taxable product.
A vague combined charge may also create risk:
Product price: USD 100 Service package: USD 43 Total: USD 143
If the invoice does not clearly identify delivery, setup, or installation charges, the seller may have a harder time supporting non-taxable treatment.
Common Compliance Issues for Ecommerce Sellers
Not separately stating delivery charges
The ability to treat delivery as a non-taxable service charge depends heavily on clear invoice presentation.
Combining service charges into vague labels
Labels such as “service package,” “processing fee,” or “miscellaneous fee” may not clearly support non-taxable treatment. Delivery, setup, and installation should be separately identified where possible.
Shifting product revenue into service fees
Service charges should be reasonable and tied to actual services. Artificially reducing the product price and increasing service charges may create audit risk.
Inconsistent platform and invoice records
If the ecommerce platform treats Missouri delivery charges as non-taxable, the invoice and order records should clearly support that treatment.
Applying another state’s rule to Missouri
Shipping taxability varies by state. Missouri differs from states where seller-charged delivery charges are generally taxable even when separately stated.
Practical Tips for Sellers Shipping to Missouri
Sellers shipping taxable goods to Missouri customers should review invoice format and checkout settings. Delivery, setup, and installation charges should be clearly stated as separate line items if the seller intends to treat them as non-taxable.
Sellers should also retain invoices, checkout screenshots, order details, delivery records, service records, platform reports, and sales tax filing records. For marketplace sales, platforms such as Amazon, Walmart, and eBay may handle tax collection as marketplace facilitators. For direct sales, sellers should verify their Missouri tax settings directly.
Conclusion
In Missouri, separately stated delivery, setup, and installation charges are generally not subject to sales tax because the dealer is performing a service. If those charges are bundled into the product price or described vaguely, the seller may lose support for non-taxable treatment.
For ecommerce sellers, the key takeaway is clear: Missouri delivery, setup, and installation charges should be separately stated and properly documented to support non-taxable treatment.
Source: Missouri Secretary of State, 12 CSR 10-103 https://www.sos.mo.gov/cmsimages/adrules/csr/current/12csr/12c10-103.pdf