Does an online food-ordering app have to collect Missouri sales tax on restaurant orders, or does the restaurant handle it?

Plain-English summary

The Missouri Department of Revenue drew a distinction for an online food-ordering platform between two very different order types. For orders from an in-state (Missouri) restaurant to a Missouri diner, the platform is not required to collect and remit sales tax as a Marketplace Facilitator -- that responsibility stays with the restaurant itself. But for orders from an out-of-state restaurant delivered into Missouri, the platform is required to collect and remit Missouri use tax as a Marketplace Facilitator.

The difference turns on which tax applies and what "marketplace facilitator" liability actually covers. Missouri's meal/drink tax under Section 144.020.1(6), RSMo is a sales tax on rooms, meals, and drinks "regularly served to the public" at a restaurant or similar establishment, and Section 144.018.3, RSMo makes the establishment itself responsible for remitting that tax -- a mandatory duty resting on the restaurant, not the ordering platform. The platform's Marketplace Facilitator obligation under Section 144.752, RSMo is specifically a use tax collection duty tied to sales "delivered into the state" -- and an order from a Missouri restaurant to a Missouri diner doesn't involve goods coming "into" the state at all (it's a purely in-state sale subject to sales tax, handled by the restaurant). By contrast, an order from an out-of-state restaurant delivered into Missouri IS a delivery into the state, triggering the platform's use tax collection duty. If the customer instead picks up the food at the out-of-state restaurant (no delivery into Missouri), no Missouri tax applies at all.

What this means for you

Online food-ordering and delivery platforms

Your Marketplace Facilitator tax obligations under Section 144.752, RSMo turn on whether an order crosses state lines into Missouri, not simply on whether you're an ordering intermediary. In-state restaurant-to-in-state-diner orders remain the restaurant's own sales tax responsibility; only out-of-state-restaurant-to-Missouri-delivery orders trigger your own use tax collection duty.

Restaurants using third-party ordering platforms

If you're a Missouri restaurant, you remain responsible for remitting sales tax on your own meal and drink sales under Section 144.018.3, RSMo, even when an online platform handles the ordering and payment collection -- the platform may pass collected tax through to you, but the remittance obligation is yours.

Accountants and tax professionals advising platforms or restaurants

Track order fulfillment geography carefully: same-state restaurant-to-diner orders are sales tax (restaurant's job), interstate deliveries into Missouri are use tax (platform's job as Marketplace Facilitator), and customer pickup at an out-of-state restaurant location triggers no Missouri tax.

Common questions

Q: Does a food-delivery app ever have to collect Missouri sales tax on restaurant orders?
A: Based on this ruling, no -- for Missouri-restaurant-to-Missouri-diner orders, the mandatory sales tax remittance duty rests on the restaurant under Section 144.018.3, RSMo, not the platform. The platform's own Marketplace Facilitator duty under Section 144.752, RSMo is a separate use tax obligation limited to orders delivered into Missouri from out of state.

Q: What if a Missouri customer orders from an out-of-state restaurant but picks the food up there themselves?
A: No Missouri tax is due in that scenario, according to the ruling, because there's no delivery into Missouri to trigger the Marketplace Facilitator use tax duty.

Q: Can a platform just pass through the sales tax it collects to the restaurant?
A: Yes -- the ruling notes the platform "may transfer sales taxes collected on behalf of Missouri restaurants to those restaurants," but the restaurants remain the parties with primary reporting and remittance obligations.

Q: Can another food-delivery platform rely on this ruling for its own tax obligations?
A: No. A Missouri letter ruling binds the Department only as to the requesting Applicant, only for three years, and only while the facts and law don't change. Another platform should confirm its own order flow and delivery patterns against Sections 144.018.3 and 144.752, RSMo.

Citations and references

Statutes:

• Section 144.020.1(6), RSMo (tax on meals and drinks regularly served to the public)
• Section 144.018.3, RSMo (restaurant/establishment remits its own meal and drink tax)
• Section 144.752, RSMo (marketplace facilitator use tax collection for sales delivered into Missouri)

Source

• Landing page: Missouri DOR Rulings Search
• Ruling: LR 8316

Original ruling text

Dear Applicant:

This is a letter ruling issued by the Director of Revenue under Section 536.021.10, RSMo, and Missouri Code of State Regulations 12 CSR 10-1.020, in response to your letter dated July 17, 2024.

The facts as presented in your letter ruling request and from your website are summarized as follows:

Applicant is an online ordering company that allows customers to order meals and beverages from restaurants through Applicant's website or mobile app. The restaurant then prepares the food for the customer.

ISSUE 1 :

Is Applicant required to collect and remit Missouri sales tax as a Marketplace Facilitator on sales to Missouri diners, from in-state (Missouri) restaurants?

RESPONSE 1 :

No. Applicant is not required to collect and remit Missouri sales tax as a Marketplace Facilitator for a Missouri restaurant with sales to Missouri diners. Applicant may transfer sales taxes collected on behalf of Missouri restaurants to those restaurants, but those Missouri restaurants are the sellers with primary reporting and remittance obligations under Missouri sales tax law.

Section 144.020.1(6), RSMo, imposes a tax upon "... sales or charges for all rooms, meals and drinks furnished at any hotel, motel, tavern, inn, restaurant, eating house, drugstore, dining car, tourist cabin, tourist camp or other place in which rooms, meals or drinks are regularly served to the public."

Section 144.018.3, RSMo, provides:

For purposes of subdivision (6) of subsection 1 of section  144.020 , a hotel, motel, tavern, inn, restaurant, eating house, drugstore, dining car, tourist cabin, tourist camp, or other place in which rooms, meals, or drinks are regularly served to the public shall remit tax on the amount of sales or charges for all rooms, meals, and drinks furnished at such hotel, motel, tavern, inn, restaurant, eating house, drugstore, dining car, tourist cabin, tourist camp, or other place in which rooms, meals, or drinks are regularly served to the public. (Emphasis Added).

As stated above, the responsibility of the restaurant to remit the tax is a mandatory requirement. Applicant is not responsible as a Marketplace Facilitator under Section 144.752, RSMo, because that is specific to the collection of use tax for goods delivered into this state. An order from a Missouri restaurant to a Missouri customer does not involve the delivery of goods 'into this state,' and is subject to sales tax.

ISSUE 2:

Is Applicant required to collect and remit Missouri use tax as a Marketplace Facilitator on sales to Missouri diners, delivered from out-of-state restaurants?

RESPONSE 2:

Yes. Applicant is required to collect and remit Missouri use tax as a Marketplace Facilitator for out-of-state restaurant orders that are being delivered into Missouri.

Section 144.752, RSMo, provides:

(1)  Beginning January 1, 2023, marketplace facilitators that engage in business activities within this state shall register with the department to collect and remit use tax, as applicable, on sales made through the marketplace facilitator's marketplace by or on behalf of a marketplace seller that are delivered into the state[.]

According to Applicant, they are a Marketplace Facilitator. As a Marketplace Facilitator for orders from out-of-state being delivered into the state, they would be responsible for collecting and remitting use tax.  If the customer picks up the food from the out of state restaurant, no Missouri tax would be due.

This letter ruling is binding upon the Department of Revenue with respect to the Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals.  If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change.  For this reason, the interpretation set forth above should be reviewed on a regular basis.  Please note that any change in or deviation from the facts as presented will render this ruling inapplicable.

Should additional information be needed, please contact Associate Counsel J. Ross Shelton General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.

Sincerely,

Wayne Wallingford