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Editorial 6 MIN READ

Missouri in August 2022: a $50 LLC, no annual report, and a sales-tax regime frozen in 2017

What it costs to form in Missouri right now, what the state skips that its neighbors don't, and the Wayfair clock ticking toward August 2023

The Editors
Staff, Incorporator.org
6 min read Updated
Contents 6 sections
  1. What the filing actually costs
  2. The annual-report thing nobody mentions
  3. Corporate tax, after the 2016 and 2018 rewrites
  4. The Wayfair thing Missouri has not done yet
  5. Who Missouri actually fits
  6. Sources

Missouri LLC costs $50 to form online and has no annual report. That pair of facts does more work than any other in explaining why Missouri keeps picking up formations from founders who crossed it off a list of twelve states and then circled back.

This is the August 2022 picture: the fee schedule as the Secretary of State's office charges it today, the corporate tax as Jay Nixon's 2016 franchise-tax repeal and Mike Parson's 2018 rate cut left it, and the one remote-seller rule Missouri still does not enforce while every other state with a sales tax already does.

What the filing actually costs

You file Articles of Organization with the Missouri Secretary of State's Corporations Division. Online, through the state's business services portal, the fee is $50. On paper, using Form LLC-1 mailed or walked into the Jefferson City office, the fee is $105. That is an unusually steep penalty for not using the web form, and it is deliberate; the state has been pushing filings online for the better part of a decade.

The statutory basis is the Missouri Limited Liability Company Act, codified at RSMo Chapter 347. Section 347.039 lists the six things the Articles must contain: the name, the purpose, the registered agent and office, whether the LLC is member-managed or manager-managed, the duration if not perpetual, and the organizer's signature. Section 347.179 sets the fee. The statute also enshrines a quirk that matters here: Missouri LLCs are required to have a written operating agreement, although they do not file it with the state. Section 347.081 uses the word "shall," which is stronger than most states' permissive language.

Against Delaware's $90 formation fee and $300 annual franchise tax for an LLC, Missouri at $50 and zero is the cheaper state to keep alive by a wide margin over any five-year horizon. Delaware's first-year bill is $390 before a registered agent; Missouri's is $50, full stop.

The annual-report thing nobody mentions

Corporations in Missouri file an annual registration report and pay $20 online or $45 on paper, under RSMo 351.120. LLCs do not. There is no periodic filing, no biennial report, no franchise-tax-masquerading-as-a- fee. Once formed, a Missouri LLC exists in the state's records until you voluntarily cancel it or the state administratively dissolves it for failing to maintain a registered agent.

This is the single most distinctive feature of the Missouri LLC regime. Most states have moved toward annual or biennial reports as a revenue source and a data-hygiene tool. Missouri's legislature has not. An LLC formed in 2010 that has done nothing since and never moved its registered agent is, as of this morning, still in good standing with no past-due balance.

The practical implication is that the true cost of a Missouri LLC over ten years is $50, plus a registered agent, plus whatever income tax flows through to the members on their federal and Missouri returns. No maintenance calendar. No June 1 notice to throw away.

Corporate tax, after the 2016 and 2018 rewrites

If you are forming a C-corp rather than an LLC, two recent tax changes define the bill.

The first is the repeal of the corporate franchise tax. House Bill 1619, signed by Governor Nixon in 2015 and fully phased out by tax year 2016, eliminated the separate franchise tax Missouri had historically levied on corporations doing business in the state. A C-corp formed in Missouri today pays no state-level entity-existence tax; the only state charges are income tax on taxable income and the $20 annual registration report.

The second is the rate cut. Senate Bill 884 of 2018 dropped the corporate income tax rate from 6.25% to 4.0%, effective for tax years beginning on or after January 1, 2020. The current rate, at RSMo 143.071, is 4.0% of Missouri taxable income. That is the lowest top corporate rate of any state with a corporate income tax. North Carolina is lower at 2.5%, but several states with no corporate income tax at all (Wyoming, South Dakota, Ohio, which uses a gross-receipts tax instead) beat both. Among states with a conventional corporate income tax, Missouri sits near the floor.

For a venture-stage C-corp that expects most of its taxable income to be apportioned elsewhere, the rate is a minor factor. For a cash-flowing regional business whose apportionment keeps most of the income in Missouri, it is a real one. A $1 million Missouri-sourced taxable income pays $40,000 in Missouri corporate tax in 2022, against $62,500 under the pre-2020 rate.

The Wayfair thing Missouri has not done yet

This is where Missouri diverges from every other state with a sales tax. Four years after South Dakota v. Wayfair, 138 S. Ct. 2080 (2018), Missouri is the last state in the country that has not yet begun enforcing an economic-nexus standard for remote sellers. A seller with no Missouri property, no Missouri employees, and no Missouri inventory is, as of today, not required to collect Missouri sales tax no matter how many dollars of goods ship to Missouri addresses.

The legal vehicle that changes this is House Bill 554, signed by Governor Parson on June 30, 2021. HB 554 establishes an economic-nexus threshold of $100,000 in annual Missouri taxable sales for remote sellers and marketplace facilitators. The effective date is January 1, 2023, with the collection obligation beginning January 1, 2023 and the full administrative apparatus online by the statute's Wayfair-conforming date. The Department of Revenue's published guidance confirms the January 1, 2023 start. For a remote seller reading this in August 2022, that means roughly four and a half months of continued non-collection into Missouri, then a sharp turn.

The practical consequence in August 2022 is narrow but real. A Colorado Shopify store shipping into St. Louis is not collecting Missouri sales tax today and is not doing anything wrong. A year from now, that same store above the threshold will be registering with the Department of Revenue and remitting at the destination rate.

This is worth factoring into any decision about where to place an operating entity versus a selling entity in the months between now and the turn of the year. The competitive window is short and closing.

Who Missouri actually fits

For a one-person consultancy domiciled in Missouri, the state is close to an optimal form. $50 once, no annual report, no franchise tax, and state income tax that flows through to an individual return at the state's graduated personal rates. There is no reason to form elsewhere unless you are raising institutional capital, in which case Delaware is still the answer your lawyer will give you.

For a holding company with no venture overlay, Missouri's no-report regime is attractive in a way Delaware's $300 annual tax is not. Wyoming at $60 plus $60 a year is the usual comparison; Missouri's first-year advantage holds, and the state's ongoing carry is lower.

For an operating business elsewhere, forming in Missouri and foreign-qualifying in the operating state gets you nothing except two sets of filings and a second registered agent to pay. Form where you are.

For a remote seller considering Missouri as a base of operations, the sales-tax timeline is the variable to watch. Placing inventory in a Missouri fulfillment center today creates physical nexus today; that has not changed. What changes on January 1 is the rule for sellers with no physical presence. If you are building a multi-state selling structure this fall, the Missouri piece of it needs a plan that assumes post-Wayfair collection by early 2023.

The $50 filing fee is the headline. The missing annual report is the sleeper. The sales-tax holdout is the clock.

Sources

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