Missouri Supreme Court denied sales tax refunds on uncollectible debt held by third party banks

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August 2014

Overview

On July 29, 2014, the Missouri Supreme Court held that two retailers were not entitled to sales tax refunds on uncollectible debt held by third party banks. The retailers could not seek refunds of sales tax paid since they received full payment of the sales tax from the banks. Missouri law states that only the person legally obligated to remit the tax can apply for a refund. The Court stated the banks could not apply for refunds because they were not the persons legally obligated to remit the sales tax. Consequently, since the retailers and banks were considered separate entities not ‘acting as a unit’ for sales tax refund purposes neither party was entitled to the refund. Circuit City Stores, Inc. and Dillard’s, Inc., consolidated vs. Director of Revenue, Missouri Supreme Court, Nos. SC93687 and SC93711 (7/29/2014)

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