In Missouri, sales tax applies only to the transfer of “tangible personal property”, and a monthly membership fee that involves no tangible property is not a taxable item. It is also illegal to overcollect sales tax. If Meh wants to claim the fee is a discount on shipping, or any other intangible discount or service, then that is not a tangible personal property either, and charging sales tax on shipping (and handling) is what got Best Buy into trouble.
(12) “Sale” or “sales” includes installment and credit sales, and the exchange of properties as well as the sale thereof for money, every closed transaction constituting a sale, and means any transfer, exchange or barter, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property for valuable consideration and the rendering, furnishing or selling for a valuable consideration any of the substances, things and services herein designated and defined as taxable under the terms of sections 144.010 to 144.525;
144.157. Violations in collecting, penalty. — 1. Any person required to collect, truthfully account for and pay over any tax imposed by sections 67.1170 to 67.1180, sections 94.800 to 94.825, and sections 144.010 to 144.525 and 144.600 to 144.745 who willfully fails to collect such tax or truthfully account for and pay over such tax or willfully attempts in any manner to evade or defeat the tax or the payment thereof, or who shall willfully and knowingly overcharge or overcollect such tax with intent to make claim to any such overcharged or overcollected amounts under section 144.190, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over, or overcharged or overcollected.
@mike808 Did you miss the last part in the quote, " things and services herein designated and defined as taxable under the terms of sections 144.010 to 144.525;" That means to me that some services are taxable.
Meh has no benefit when collecting taxes. Anything collected is turned into the tax collector’s office. Online retailers have fought hard to not have to collect taxes but are losing that battle. So the OP is a little crazy if they think meh is doing this purposely to make more money. I’m sure their lawyers that know much more about this than any of us know when taxes must be collected and only do it when absolutely necessary.
@cengland0 I did not miss that part. There are no mentions of requiring taxes for any services, memberships, or anything even close to what Meh does, or VMP and Mehmbership programs are, anywhere in those sections. They might be required to report corporate income tax, but that’s separate from sales tax, and the things to which sales tax applies.
I would not object were tax to be charged only for the specific month when we recieve some tangible item as a benefit of our membership, since they are clearly defined as monthly memberships, and we did actually receive a tangible item. But I never got any socks, nor anything else tangible from my membership. Only “opportunities” to receive an intangible discounted price.
I do object to Meh charging and collecting sales tax on services to which they are not authorized to collect sales tax on, as they specifically do receive a 2% collection fee out of the sales taxes they collect.
Collecting sales tax, under the false pretense that it is required, when it is not, is de facto overcollection, and that is prohibited by the other statute 144.157.
Arguably, the practice may also constitute consumer fraud by falsely demanding payment of sales tax to which they were not entitled to under color of law and the authority of the state when they have no such authority. Such as the example when Best Buy’s practice of falsely demanding and collecting sales tax on shipping and handling under the pretense that it was required by state law.
So to that end, the burden of proof is for Meh to point out the statute that requires them to collect sales tax on their membership program.
Missouri law is stating “this list of things must be taxed”, not the inverse. If whatever is not on the list, collecting sales tax is prohibited (not authorized) by the state because assessing a sales tax in the first place is also not authorized.
@cengland0 I’m not saying Meh is doing this to make money. I’m saying they’re doing it because they’re too lazy to do it properly, and fraudulently collecting for an unauthorized sales tax on the MVP and Mehmberships.
@mike808 Missouri must be a great place to live if you don’t have to pay taxes on services like hair cuts, lawn mowing, house painting (you provide the paint), driveway pressure washing, etc.
I also find it incredible that the company that collects the tax is allowed to keep 2% as a collection fee with no limits. In Florida, the collection allowance is 2.5% but is capped at $30 making it virtually useless. “In Florida if you electronically file (e-file) your return and electronically pay (e-pay) tax timely, you are entitled to receive a collection allowance. The collection allowance is 2.5 percent (0.025 of the first $1,200 of the Amount Due (Line 10), not to exceed $30.”
I’m not a lawyer but it seems you know a lot of tax law so you should proceed with a class action suit against meh. According to the tax law, the penalty is equal to the amount of tax they wrongfully collected.