PURPOSE: This rule lists the requirements a business or corporation must satisfy to enter into a use tax direct pay agreement with the Department of Revenue.

1. (1) A business or corporation may apply to the department for a use tax direct pay agreement. The application must be submitted in writing. The direct pay agreement is an agreement by which the department allows a business or corporation to pay consumer’s use tax on its purchases directly to the department rather than vendor’s use tax to the seller.

2. (2) The following requirements must be satisfied before the department will consider a business or corporation for a direct pay agreement:

   1. (A) Submission of an application signed by the applicant business owner or an officer of the applicant corporation;
   2. (B) The applicant business or corporation agrees to accrue and pay all taxes imposed under sections 144.600–144.745, RSMo and Article IV, Sections 43A and 47A of the Missouri Constitution on the purchases of all taxable items made by the applicant business or corporation which are stored, used or consumed by the applicant, excluding items which are exempted under section 144.617, RSMo;
   3. (C) The accrued taxes will be paid in accordance with the applicant business’ or corporation’s filing status as determined by the Revised Statutes of Missouri. The applicant business or corporation will be assessed penalties and interest in accordance with sections 144.665 and 144.720, RSMo for failure to file and to pay the accrued taxes in accordance with their filing status;
   4. (D) The applicant business or corporation will not qualify for the timely filing discount provided in section 144.710, RSMo; and
   5. (E) Records to support that the business or corporation annually purchases taxable items in excess of seven hundred fifty thousand dollars ($750,000), excluding the value of taxable items for which exemption certificates were given.
3. (3) The department has sole authority to decide whether the applicant qualifies for a direct pay agreement.
4. (4) An applicant who has been denied a direct pay agreement may reapply. The applicant will be required to meet the qualifications for a direct pay agreement.
5. (5) The holder of a direct pay agreement must furnish a copy of the direct pay certificate to all sellers from whom they make purchases of taxable items. The direct pay certificate relieves the seller of any obligation to collect vendor’s use tax imposed by Chapter 144, RSMo and Article IV, Sections 43A and 47A of the Missouri Constitution from the holder. This certificate will apply to all purchases of taxable items from the date of the certificate.
6. (6) A direct pay agreement and direct pay certificate will remain valid and enforceable until the department issues a cancellation notice. The department may cancel a direct pay agreement at any time.
7. (7) The department will send notice of cancellation to the holder of the direct pay certificate by certified or registered mail.
8. (8) The holder of a direct pay certificate may notify the department that the direct pay certificate will be voluntarily relinquished.
9. (9) Upon receipt of a notice of cancellation from the department, the business or corporation, within ten (10) days from the date of the cancellation letter, shall notify each seller in writing that the direct pay certificate is no longer valid.
10. (10) The holder of a direct payment certificate will be required to provide proof of qualification every two (2) years from the date of the original authorization.
11. (11) Any seller who accepts a direct payment certificate in good faith from a purchaser can rely on the certificate until s/he receives written notice of cancellation from the purchaser.

AUTHORITY: sections 144.190.4 and 144.705, RSMo 1994.* Original rule filed July 2, 1990, effective Dec. 31, 1990. *Original authority: 144.190.4., RSMo 1939, amended 1941, 1943, 1945, 1979, 1986, 1988, 1991 and 144.705, RSMo 1959. 12 CSR 10-4