If I resell promotional items like pens, banners, and brochures to not-for-profit organizations, can I keep skipping sales tax on those sales, and what do I need to have on file?

Plain-English summary

The Missouri Department of Revenue ruled that a licensed reseller of educational, marketing, and promotional items -- things like pens, key chains, banners, flags, manuals, and brochures -- does not have to collect sales tax when it sells those items to not-for-profit organizations, as long as the sale supports the nonprofit's civic, charitable, or educational activities and the seller holds a valid exemption form from that organization.

The Applicant already had a Missouri resale license and normally collects sales tax when it resells these promotional items at retail. But it also sells to numerous not-for-profit organizations without charging sales tax, and it had on file a Limited Exemption from Missouri Sales and Use Tax on Purchases and Sales Form from at least one of them. The Department confirmed this practice is correct: Missouri law exempts sales made by or to religious, charitable, and educational organizations (and public elementary/secondary schools), as well as sales made by or to not-for-profit civic, social, service, or fraternal organizations, when the sale furthers those organizations' exempt functions.

The catch is documentation. Missouri law puts the burden on the seller to prove a sale wasn't a taxable retail sale, which means the seller must obtain and keep an exemption certificate (or other written evidence of exemption) from every not-for-profit customer it doesn't charge tax to -- not just from "at least one" of them, as the Applicant had done so far.

What this means for you

Promotional-product resellers

If you resell items like pens, banners, flags, or brochures to not-for-profit customers, you can skip collecting sales tax on those sales -- but only for the specific transactions that support the nonprofit's civic, charitable, or educational function, and only if you have a signed exemption certificate from that organization on file before (or at) the time of the sale.

Nonprofit organizations buying promotional items

If your organization is a religious, charitable, educational, or qualifying civic/social/service/fraternal nonprofit, you generally don't owe Missouri sales tax on purchases used in your exempt activities. Expect your vendor to ask you for a completed exemption form (such as the Limited Exemption from Missouri Sales and Use Tax on Purchases and Sales Form) before they will waive the tax.

Accountants and tax professionals

The ruling rests on the general resale/exemption framework in Section 144.030.2(19) and (20), RSMo, plus the documentation requirement in Section 144.210.1, RSMo. The seller bears the burden of proving any sale wasn't a taxable retail sale, and that burden is met (and only met) by collecting and retaining a signed exemption certificate or equivalent written evidence from each exempt purchaser.

Common questions

Q: Do I need a separate exemption certificate from every not-for-profit customer, or is one on file enough?
A: The Department said the Applicant "must collect a sales tax exemption form from each not-for-profit organization to whom Applicant sells items" without charging tax -- so yes, you need one per organization, not just one on file generally.

Q: Does this exemption cover all sales to a nonprofit, or only some?
A: Only sales that are "in furtherance of the civic, charitable, or educational function" of the not-for-profit. The ruling doesn't exempt every possible purchase by a nonprofit -- it exempts sales tied to the organization's exempt activities.

Q: What if the promotional items are sold to an ordinary for-profit business instead?
A: This ruling only addresses sales to not-for-profit organizations. The Applicant's regular retail resales (where it collects sales tax at the point of sale) are unaffected and remain taxable in the ordinary course.

Q: Can I rely on this ruling for my own business?
A: Not directly. This letter ruling is binding on the Department only with respect to the Applicant who requested it, only for three years from the date of the letter, and only as long as the facts don't change and the underlying statutes or case law aren't changed. Other taxpayers can look to it for how the Department reasons, but should not treat it as binding on their own situation.

Q: What happens if the law changes after this ruling was issued?
A: The ruling itself warns that if the General Assembly or the courts change the interpretation of the law, a taxpayer who keeps relying on the outdated ruling could face additional taxes, interest, and penalties going forward -- so the position should be reviewed regularly.

Citations and references

Statutes and regulations:

• Section 536.021.10, RSMo (letter ruling authority)
• Section 144.030.2(19), RSMo (exemption for sales by or to religious, charitable, and educational organizations and public schools)
• Section 144.030.2(20), RSMo (exemption for sales by or to not-for-profit civic, social, service, or fraternal organizations)
• Section 144.210.1, RSMo (seller's burden to prove an exempt sale; exemption certificate requirement)
• 12 CSR 10-1.020 (letter ruling procedure)
• 12 CSR 10-110.955(3)(D) (exemption for sales by or to religious and charitable organizations and institutions)

Source

• Landing page: Missouri DOR Rulings Search
• Ruling: LR 8380

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 November 20, 2025.

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

Applicant has a Missouri resale license. Applicant occasionally purchases educational, marketing, and promotional items such as pens, key chains, banners, flags, manuals, brochures, etc. Applicant resells these items and collects sales tax at the point of sale. Applicant sells to numerous not-for-profit organizations and does not assess them sales tax at the point of sale. Applicant has on file a Limited Exemption from Missouri Sales and Use Tax on Purchases and Sales Form from at least one such not-for-profit organization.

ISSUE 1:

Can Applicant continue not collecting sales tax on the resale of items to not-for-profit organizations?

RESPONSE 1:

Yes. Applicant must not collect sales tax on sales to not-for-profit organizations, so long as such organizations have a relevant exemption form.

Section 144.030.2(19), RSMo, provides the following exemption:

All sales made by or to religious and charitable organizations and institutions in their religious, charitable or educational functions and activities and all sales made by or to all elementary and secondary schools operated at public expense in their educational functions and activities.

Section 144.030.2(20), RSMo, provides an exemption for:

...all sales made by or to not-for-profit civic, social, service, or fraternal organizations...in their civic or charitable functions and activities...

Missouri Code of State Regulations CSR 10-110.955(3)(D) provides:

All sales made by or to religious and charitable organizations and institutions in their religious, charitable or educational functions and activities are exempt from tax. All sales by the same type of organizations and institutions of other states are exempt from tax providing such organizations and institutions are exempt from a similar tax on their own states.

Section 144.030.2(19), RSMo, provides an exemption for sales made to religious and charitable organizations in their religious, charitable, or educational functions and elementary and secondary schools. Section 144.030.2(20), RSMo, provides an exemption for sales made to not-for-profit civic, social, service, or fraternal organizations in their civic or charitable functions and activities. Applicant resells some education, marketing, and promotional items to various not-for-profit organizations. These sales are exempt from sales tax to the extent they are in furtherance of the civic, charitable, or educational function of the not-for-profit organization.

ISSUE 2:

Should Applicant collect a sales tax exemption form from each not-for-profit organization to whom Applicant sells items?

RESPONSE  2:

Yes. Applicant must collect a sales tax exemption form from each not-for-profit organization to whom Applicant sells items without collecting sales tax.

Section 144.210.1 RSMo, provides:

The burden of proving that a sale of tangible personal property, services, substances or things was not a sale at retail shall be upon the person who made the sale, except that with respect to sales, services, or transactions provided for in section 144.070.  The seller shall obtain and maintain exemption certificates signed by the purchaser or his agent as evidence for any exempt sales claimed...

Applicant is a vendor to the extent they resell educational, marketing, and promotional items. Applicant should receive an exemption certificate or other written evidence of exemption authorized by the relevant taxing authority from any organizations Applicant does not collect sales tax from at the point of sale.

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 Legal Counsel, Gabriel Barnes, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.

Sincerely,

Trish Vincent