Missouri Code of State Regulations
Title 12 - DEPARTMENT OF REVENUE
Division 10 - Director of Revenue
Chapter 4 - State Use Tax
Section 12 CSR 10-4.622 - Marketing Organizations Soliciting Sales Through Exempt Entity Fund-Raising Activities

(1) Sales by marketing organizations through representatives or members of elementary and secondary schools, religious and charitable organizations and other not-for-profit entities exempt from sales or use tax are subject to Missouri use tax on the marketing organizations' net receipts from those sales. Use tax is not due or required to be collected on the amount retained by the exempt organization or that portion of the sales proceeds which will be returned to the exempt organization.

(2) Use tax shall be collected on each item sold in accordance with sections 144.610.2. and 144.635, RSMo and the tax may be collected by exempt organizations' members by a separate statement of the tax due on each sales slip or other evidence of sale.

(3) The marketing organization should instruct the exempt organization that use tax must be collected on the portion of gross receipts returned to the marketing organization.

(4) The tax due may be calculated on the proceeds to be returned to the marketing organization and then added to the original selling price (Example 1) or calculated on the proceeds to be returned to the marketing organization and included as part of the selling price (Example 2).

(5) Example 1: Marketing organization "A" agrees to provide widgets to the band at school "B" to be sold by band members to raise funds for a band trip. The widgets are to be sold for ten dollars ($10) each, with "A" to receive six dollars ($6) and "B" four dollars ($4) per widget. School "B" should collect twenty-five cents (250) use tax in addition to the ten dollar ($10) sales price. The twenty-five cents (250) represents use tax at the hypothetical rate of 4.225% on the six-dollar ($6) taxable receipts and should be remitted by school "B" to organization The four dollars ($4) received by school "B" is exempt from tax. "A" is required to remit twenty-five cents (250) to the Department of Revenue for use tax on its six dollar ($6) net receipts. It makes no difference whether school "B" (which collects ten dollars and twenty-five cents ($10.25) from each customer) sends the ten dollars and twenty-five cents ($10.25) to marketing organization "A" which then returns four dollars ($4) to band "B" or sends only six dollars and twenty-five cents ($6.25) to marketing organization

(6) Example 2: Using the same facts as Example 1 in section (5), school "B" could charge ten dollars ($10) for the widget with the express understanding that the ten dollars ($10) charged includes the use tax. The tax would be computed on the six dollars ($6) received by "A". The tax would still be twenty-five cents (250) ($6 X 4.225%). "A" would be required to remit twenty-five cents (250) per widget to the Department of Revenue. School "B" would receive three dollars and seventy-five cents ($3.75) per widget sold which would not be subject to tax.