What Is Tax 1 and Tax 2 on My Receipt in Missouri?

When reviewing a purchase receipt, many consumers encounter multiple lines for taxes, often labeled as “Tax 1” and “Tax 2.” Understanding sales tax components in Missouri helps demystify these entries. This article explains Missouri’s sales tax structure and what these distinct tax lines typically represent.

Understanding State Sales Tax

Missouri imposes a statewide sales tax on retail purchases. This tax is a percentage applied to the sale of tangible personal property and certain services. The current state sales tax rate in Missouri is 4.225%. Funds collected from this state sales tax support various government functions, including general revenue, conservation, education, and parks/soils programs.

This state portion of the sales tax is a consistent rate across all jurisdictions within Missouri. Businesses collect this tax from consumers at the point of sale. On receipts, this statewide charge is often the first tax component, appearing as “Tax 1” or similar.

Understanding Local Sales Taxes

In addition to the state sales tax, consumers in Missouri also pay local sales taxes. These additional taxes are imposed by local jurisdictions like counties, cities, and special taxing districts. Local tax rates vary considerably by geographic location.

Local sales tax rates in Missouri can range from 0% up to 5.875%, meaning the combined state and local sales tax rate can reach as high as 10.1% in some areas. These local taxes are collected by sellers along with the state sales tax and are remitted together to the Missouri Department of Revenue. The Department then distributes local portions to cities, counties, and districts.

Display on Receipts

The appearance of “Tax 1” and “Tax 2” on a receipt typically reflects the separation of state and local sales tax components. Point-of-sale (POS) systems often display these charges distinctly. This separation aids internal accounting and simplifies reporting, even though both state and local taxes are remitted to the Missouri Department of Revenue as a single sum.

“Tax 1” generally represents the fixed state sales tax rate of 4.225%. “Tax 2” commonly aggregates all local sales taxes for that specific transaction location, encompassing county, city, and special district levies. While specific labels may differ (e.g., “MO Tax” or “Local Tax”), the principle remains: one line for the state portion and another for the combined local portion, constituting the total sales tax due.

Common Taxable Items

In Missouri, sales tax generally applies to the retail sale of tangible personal property. This includes goods like clothing, electronics, and most general merchandise. Unless legally exempted, all sales of physical goods are presumed taxable.

While many services are typically not subject to sales tax in Missouri, there are specific exceptions. Exceptions include admissions and seating for amusement, entertainment, recreation, and athletic events. Utility services like electricity, water, gas, and local/long-distance telecommunication (excluding internet) can also be taxable. Labor to fabricate a product for retail sale also falls under taxable services.