Missouri Law Expanding Sales and Use Tax Refunds Goes Into Effect

by Karen Stern

Missouri Senate Bill 87 (SB 87), which modified several tax provisions and provides an expanded refund opportunity related to sales and use tax for businesses, went into effect on August 28, 2019. If you believe you have overpaid Missouri sales or use tax, you may file a claim for a refund within 10 years of the due date of original return or the date of overpayment, whichever is later. Prior to August 28, a refund claim had to be made within three years.

Strategically, this may be a good time to evaluate your sales and use tax filings and apply for refunds for your small business. The primary benefit is that you can seek a refund for an additional seven years, which could potentially double the refund claim. However, there is an additional benefit related to the discrepancy between the statute of limitations for assessments and the statute of limitations for refunds. The Missouri Department of Revenue cannot issue a notice of assessment for sales or use tax more than three years after the date you filed the return or the due date of such return, whichever is later, assuming there was no fraud. As a result, the Department will not be able to assess additional sales or use tax the first seven years of a 10-year refund claim.

For more information on how this law may provide a refund opportunity for your business, or for details on how our team can assist you with state and local tax planning, please reach out to Pam Huelsman, Principal and State and Local Tax (SALT) practice leader, at phuelsman@bswllc.com; Bernie Ottenlips, SALT Principal, at bottenlips@bswllc.com; or Amy Jackson, SALT Principal, at ajackson@bswllc.com.

Karen Stern, CPA, (kstern@bswllc.com), partner in charge, Brown Smith Wallace Entrepreneurial Services Group, provides tax and accounting services for companies ranging from start-ups to $20 million in revenue.