The Missouri Department of Revenue recently ruled that an online marketplace used by a farmer to sell beef raised on the farm did not qualify as a “marketplace” for purposes of the sales and use tax farmer’s market exemption. Under Missouri law, “all sales of farm products sold at a farmers’ market” are exempt from sales and use tax. The taxpayer at issue raised cattle on her farm and used an online marketplace to advertise and sell beef. The term “farmers’ market” is defined, in part, as a site that operates principally as a “common marketplace” for farmers to sell farm products directly to consumers. To determine if the online marketplace qualified, the Department looked to the dictionary definition of a marketplace which was “an open square or place in a town where markets or public sales are held.” The Department ruled that the definition of a marketplace did not include virtual platforms or e-commerce sites. The Department also concluded that the taxpayer did not meet the farmers’ market exemption because the exemption required that the food sold be processed by the farmer. In this instance, the taxpayer outsourced the slaughter and processing of her cattle. Therefore, the taxpayer’s sales were subject to Missouri sales and use tax, albeit at the reduced rate that applies to food. Please contact John Griesedieck at 312-665-3024 with questions on Private Letter Ruling No. 7975.