Software as a Service Not Taxable in Missouri

Jul 8th, 2014

The Missouri Department of Revenue recently updated its regulations to address software as a service.

Effective July 30, 2014, regulation 12 CSR 10-109.050 defines "software as a service" as a model for enabling ubiquitous, convenient, and on-demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or service provider interaction. These computing resources may include networks, servers, storage, applications, and services. "Software as a service" includes platform as a service models, infrastructure as a service models, and similar service models. It does not include any service model that gives the purchaser the right to use specifically identified tangible personal property.

Software as a service is not subject to Missouri sales tax. The service provider, however, must pay tax on its purchases of tangible personal property used to provide the service.