Governor Signs Legislation Stopping the Collection of Sales Tax on Delivery Fees

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JEFFERSON CITY — The governor today signed into law Senate Bill 16, a measure sponsored by Sen. Will Kraus, R-Lee’s Summit, that exempts delivery charges from sales and use taxes. Senator Kraus filed the legislation after the Department of Revenue sent a letter to Missouri business owners last summer notifying them that they may have to start collecting sales tax on delivery charges.

SB 16 Bill Signing
Senator Will Kraus and his family look on as the governor signs Senate Bill 16 into law.

“Over the years, it’s become increasingly common for our courts to hand down a ruling and then see the Department of Revenue reinterpret state tax law — without legislative approval and without any regard for the impact on hardworking Missouri families,” said Kraus. “I sponsored Senate Bill 16 as part of my ongoing effort to rein in bureaucratic overreach by the DOR and protect Missouri taxpayers from its egregious revenue-grabs.”

In 2015, the Missouri Supreme Court ruled in Alberici Constructors, Inc. v. Director of Revenue that charges for delivery of a rented crane are subject to use tax because the parties intended for delivery of the crane to be part of the crane rental. In response to the ruling, the DOR sent a letter notifying Missouri business owners they may soon be required to collect sales tax on delivery charges, and not just on cranes, but possibly even on the pizza you order.

“Passing SB 16 on behalf of Missouri’s business community and families was a top priority of mine for the 2017 session,” added Kraus. “I want to thank all my House and Senate colleagues who supported this important legislation, as well as the governor for signing it into law.”

Senate Bill 16 will take effect Aug. 28, 2017.