Is a software company that lets customers run online auctions and connect with third-party payment processors a 'Marketplace Facilitator' required to collect Missouri sales tax, even though it never touches the money?

Plain-English summary

The Missouri Department of Revenue ruled that a software company providing an online auction platform is not a Marketplace Facilitator and therefore has no duty to collect and remit Missouri sales tax on the sales its customers make through the platform.

The company (the "Applicant") offers both downloaded software and a SaaS ("Software as a Service") hosting environment that lets its customers run online auctions and advertise items for sale. Applicant never bids, never takes title to items, never sets prices, never finalizes sales, and never acts as an agent or broker for its customers. Critically, Applicant does not collect, hold, or distribute any of the funds involved in a sale -- its customers independently choose their own third-party payment processors, and Applicant has no visibility into or control over the money that changes hands. Applicant earns its revenue from subscription fees, listing fees, referral fees, premium features, ads, and support services, not from a cut of the sale proceeds.

Section 144.752, RSMo, defines a Marketplace Facilitator using both sale facilitation and collection and transmission of payment. Response 1 says this applicant is not a Marketplace Facilitator because it does not collect or remit payments for users' sales.

The same letter contains an unresolved conflict on connecting sellers to third-party payment processors. Response 3 says "Yes": connection capability constitutes "indirect payment processing" under Section 144.752(1). Its Issue 3 text is truncated to "Does," so the precise question is unavailable. Response 4 says "No": merely providing a connection is not indirect payment processing if there is no direct or indirect agreement with third parties to collect and transmit payment. The letter does not reconcile these answers. A reader cannot safely treat either response as its single clear rule on payment-processor connections.

The Department declined to answer a broader question about the legislature's intent behind the Marketplace Facilitator definition, noting Missouri does not maintain formal legislative history and that such policy questions are outside the scope of a letter ruling. It also ruled that, because Applicant has no access to transaction-level payment records, it has no obligation to obtain or retain such records.

What this means for you

Software and SaaS platform providers

The Department concluded this applicant was not a Marketplace Facilitator on its described facts, which include no collection, holding, or distribution of auction proceeds. The contradictory Responses 3 and 4 leave the legal effect of a platform's connection to third-party processors unclear. The applicant-specific conclusion does not resolve that conflict for another platform.

Recordkeeping

Response 5 says this applicant need not keep transaction-level records it cannot access. That answer depends on the lack of access described in the letter.

Common questions

Q: Does linking sellers to third-party payment processors count as indirect payment processing?
A: This letter gives conflicting answers. Response 3 says connection capability does count; Response 4 says merely providing a connection does not count if no agreement to collect and transmit payment exists. Issue 3 is truncated, and the Department does not reconcile the responses.

Q: Was this applicant classified as a Marketplace Facilitator?
A: No. Response 1 says it was not, because it did not collect or remit payments for goods sold by users of its site. The later conflict about processor connections limits how confidently that answer can be applied to a different platform.

Q: Did the Department answer a question about legislative intent or tax-collection tools?
A: No. Response 2 says legislative intent and future alternatives were beyond the letter's scope.

Q: Must this applicant keep records of sales it cannot see?
A: Response 5 says it need not keep transaction-level records to which it has no access.

Citations and references

Statutes and rules:

• Section 536.021.10, RSMo (authority for the Department to issue letter rulings)
• 12 CSR 10-1.020 (letter ruling procedure)
• Section 144.752, RSMo (definition of "Marketplace Facilitator")
• Section 144.752(1), RSMo (direct/indirect payment processing prong of the definition)
• 12 CSR 10-113.400(2)(c) (Marketplace Facilitator regulation, mirrors the statutory definition)

Source

• Landing page: Missouri DOR Rulings Search
• Ruling: LR 8393

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 March 24, 2026.

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

Applicant provides both downloaded software and a Software as a Service ("SaaS") technology solution to enable customers to advertise items for sale online.  Applicant provides its customers with a digital infrastructure in the form of both an offline, downloaded and remotely accessed software, as well as an online hosting environment to enable them to manage and independently conduct auction related activities.  Applicant does not participate in bidding, take title to any items, buy or list products for sale, or act as an agent, broker or intermediary.

The digital auction infrastructure supports multiple auction types.  Customers maintain full control over their auction events including forms of payment they will accept.  Customers may opt to list exclusively on their own websites.  Applicant does not set prices, list products for sale, finalize sales, engage in payment processing/collection or enforce contractual terms between Customers and their Customers.  Applicant does not have full visibility into final transactions.

Applicant earns revenue through subscription fees, listing fees, referral fees, premium features, banner ads, custom websites, and support/training.  Applicant provides branding options.  Applicant does not represent auctions as its own.  Applicant maintains only limited supervision and control over behavior of entities using the site.

Applicant does not collect, hold, or distribute funds related to auctions on its platform. Customers independently select their third-party payment processors.  Applicant has only interfaces enabling independent selection of payment methods.  Applicant does not have access to payments made by customers made through the site or to third parties.  Applicant has no role in third-party payment provider selection, administration or workings and no access to money flowing thereto and therefrom.

RESPONSE 1:

No, the Applicant, as described above, is not a Marketplace Facilitator under Missouri law because it does not collect or remit payments for goods sold by users of the site.

Section 144.752, RSMo, provides that a Marketplace Facilitator is a person that facilitates a sale by a marketplace seller and collects and transmits payments arising from the sale.  In this case, Applicant does not collect or transmit payments arising from sales and therefore is not a Marketplace Facilitator.  12 C.S.R. 10-113.400(2)(c) provides the same.

ISSUE 2:

Was it Missouri's intent in defining a Marketplace Facilitator to (a) include software

providers whose solution for its customers offers the ability to connect sellers

(Customers) and third-party payment processors, without direct involvement in

processing, receiving, or controlling payments, (b) does this answer change if the

software provider also offers tools to allow Customers to collect applicable tax?

RESPONSE 2:

Missouri does not maintain legislative history so questions regarding the intent of Missouri's lawmakers in this circumstance and future alternatives is beyond the scope of this letter ruling.

ISSUE 3:

Does

RESPONSE 3:

Yes. Providing connection capability that enables Customers to connect independently with third-party payment processors constitutes "indirect payment processing" as contemplated by Section 144.752(1), RSMo.

The term "indirect payment processing" is not defined in the statutes, rules or common law.  Its meaning can be taken from the context of the wording of the statute.   Any facilitation of collection of money from a buyer and transmission to a seller or any taxing agency.  This test is the second prong in the "Marketplace Facilitator" definition.  Subsection (b) provides for inclusion of such cases where the collection of money is either direct or indirect.  In this case it would be because of the link between collection by the software platform and the paying and receiving entities.

ISSUE 4 :

Does the Department consider providing a connection to payment processors through a technology solution as "indirect" payment processing in the context of Marketplace Facilitator classification?

RESPONSE 4:

No. Merely providing a connection to payment processors through a technology solution is not "indirect" payment processing in the context of Marketplace Facilitator classification as long as it does not constitute direct or indirect agreement with third parties to collect payment from purchasers and transmission of all or part of the payment to the marketplace seller.

ISSUE 5:

Does the Applicant have an obligation to obtain and maintain transaction-level records for transactions where it is unable to access or control payments or confirm final sale?

RESPONSE 5:

No. The access described indicates lack of access to the records described.  If the Applicant has no access to the records Applicant is not required to keep those records on file.

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 Senior Counsel Kent L. Brown, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.

Sincerely,

Trish Vincent