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.

Under Section 144.752, RSMo, a "Marketplace Facilitator" is a business that facilitates a sale by a marketplace seller and collects and transmits (directly or indirectly) the payment for that sale. Because Applicant never collects or transmits any of the payment -- not even indirectly -- the Department concluded it fails the payment-collection half of the test and is not a Marketplace Facilitator. The Department also clarified that merely giving customers a way to connect with third-party payment processors is not, by itself, "indirect payment processing" -- what matters is whether the platform actually facilitates the collection and transmission of the money, not whether it makes a connection possible.

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

If your platform lets customers list, advertise, or run auctions/sales but you never touch the payment -- no collecting funds, no holding funds, no transmitting funds to the seller or a tax authority -- this ruling supports the position that you are not a Marketplace Facilitator under Missouri law, even if your customers use your tools to find and connect with payment processors. The key fact here was the total absence of payment collection or transmission by the platform.

Marketplace facilitators and online marketplaces that DO handle payments

This ruling cuts the other way if your business actually collects money from buyers and transmits it (in whole or part) to sellers, even through a third party you've contracted with. That is the "direct or indirect" payment processing the statute targets, and the Department made clear that arrangement -- not mere technological connectivity -- is what triggers Marketplace Facilitator status and the duty to collect Missouri sales tax.

Recordkeeping

If you have no access to or control over transaction-level payment data because your role stops at connecting parties, this ruling supports not being required to obtain or maintain those records. If your access or role changes, this conclusion could change too.

Accountants and tax professionals

The ruling turns on the two-prong statutory test in Section 144.752, RSMo: (1) facilitating a sale, and (2) collecting and transmitting payment, directly or indirectly. Applicant satisfied only the first prong. Watch for facts that would satisfy the second prong -- any arrangement, even indirect, where the platform is part of the chain that collects money from a buyer and moves it to a seller or tax authority.

Common questions

Q: Does simply linking a buyer to a third-party payment processor make a software platform a Marketplace Facilitator?
A: No. The Department ruled that merely providing a connection to payment processors through a technology solution is not "indirect" payment processing unless the platform is directly or indirectly party to an agreement to collect payment from purchasers and transmit it to the seller.

Q: What if the software platform also offers tools that help customers calculate or collect their own sales tax?
A: The Department did not answer this directly -- it said questions about legislative intent and future variations on the facts were outside the scope of the letter ruling, since Missouri does not maintain legislative history to draw on.

Q: Does the platform have to keep records of transactions it can't see?
A: No. Because Applicant has no access to or control over payment data or final sale confirmation, the Department ruled it has no obligation to obtain or maintain those transaction-level records.

Q: Can any other business just point to this ruling and skip collecting Missouri sales tax?
A: No. This letter ruling binds the Department only as to this specific Applicant and only for three years from its date, and only as long as the facts don't change and the underlying law isn't changed by the General Assembly or the courts. No other taxpayer can legally rely on it -- it is useful only as an illustration of the Department's reasoning. Businesses with similar facts should confirm their own position, ideally with their own ruling request or a tax professional.

Q: What law does this rest on?
A: The core test is Section 144.752, RSMo, which defines "Marketplace Facilitator" as a business that facilitates sales by marketplace sellers and collects/transmits the related payments, directly or indirectly. The Department's own regulation, 12 CSR 10-113.400(2)(c), mirrors that definition. The ruling itself was issued under Section 536.021.10, RSMo, and 12 CSR 10-1.020, which govern the Department's letter-ruling process.

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