Missouri Sales Tax Bond

Businesses that sell tangible property in Missouri must hold a sales tax license. Businesses with this type license must also secure a Missouri sales tax bond. This type of surety bond ensures that the state is protected against non-payment of sales tax by licensed businesses.

A Missouri sales tax bond is a contract between three parties. The licensed business is known as the principal and is responsible for posting a bond. The obligee is the state of Missouri requiring a bond to be secured.

A surety company provides the bond to the principal and pays claims if sales taxes are not paid in a timely fashion, but the business is required to repay these claims to the surety.

Revised Statutes, Title X Taxation and Revenue, Chapter 144 in Missouri dictate the rules surrounding sales and use taxes for businesses operating in the state.

Part of the requirements for most merchants or retailers is the need to post a Missouri sales tax bond to ensure these taxes are collected and paid on time. The obligee of a Missouri sales tax bond is the State of Missouri, through the Director of Revenue. Contact information for the obligee is as follows:

Missouri Department of Revenue

Taxation Division

Harry S. Truman State Office Building

301 West High Street

Jefferson City, Missouri 65101

Phone: 573-751-3505

The state of Missouri dictates which businesses are required to secure a Missouri sales tax bond as part of the licensing or permitting process. Any business that engages in the sale of tangible goods is likely to need a sales tax bond to comply with the law.

Obtaining a Missouri sales tax bond starts by submitting a brief online application. Once the surety company reviews your business details and financial circumstances, you are provided a quote for your sales tax bond and instructions on how to complete the process.

The cost of a Missouri sales tax bond depends on several factors, including the amount of the bond you need and your financial standing.

To determine the bond amount, the state calculates three times the monthly sales tax for established companies or estimates this amount for new businesses, but the total bond amount is not the price you pay.

The surety company that provides your Missouri sales tax bond charges a percentage of the bond, typically ranging from 1 to 5 percent.

Your rate is based on your personal credit score, business financials, and past claims history. It is possible to get a bond with bad credit, but businesses that have a low credit score due to court judgments, tax liens, or other negative marks may pay 10 percent or more for a Missouri sales tax bond.

Sales tax bonds issued for Missouri businesses must be continuous to comply with current state laws. This means the bond cannot be canceled unless by the surety.

There is a renewal process for Missouri sales tax bonds which must be completed in line with the business license or permit’s expiration date. The surety company providing a Missouri sales tax bond sends renewal information and details on how to complete the process prior to the end of the renewal period.