Ten-Year Refund Statute of Limitations for Sales Tax Refunds in Missouri
by Karen Stern
Ten-Year Refund Statute of Limitations for Sales Tax Refunds in Missouri
Specific to businesses operating in Missouri, we wanted to share a reminder regarding an expanded refund opportunity related to sales and use tax. Effective August 28, 2019, if you believe you have overpaid Missouri sales or use tax, you may file a claim for refund within ten (10) years of the due date of the original return or the date of overpayment, whichever is later. Prior to August 28, 2019, a refund claim had to be made within three (3) years.
Strategically, now is a good time for businesses to evaluate sales and use tax filings and apply for refunds. There are a few benefits to note. One benefit is that businesses get to seek a refund for an additional seven (7) years, which could essentially double the refund claim. In addition, there is a benefit related to the mismatch between the statute of limitations for assessments and the statute of limitations for refunds. The Department of Revenue cannot issue a notice of assessment for sales or use tax more than three (3) years after the date you filed the return or the due date of such return, whichever is later, assuming there was no fraud. Why does that matter? Well, the Department will not be able to audit (beyond the claim issues) the first seven (7) years of a ten (10) year refund claim.
Bottom line, we encourage businesses to start taking a look at their sales and use tax filings at their earliest convenience to see if they qualify for these expanded refund benefits.
Karen Stern, CPA, (karen.stern@armaninoLLP.com), partner, Armanino, provides tax and accounting services for companies ranging from start-ups to $20 million in revenue. Prior to joining Armanino, Karen was a partner and practice leader for Brown Smith Wallace’s Entrepreneurial Services Group.