Missouri’s retail businesses currently face a big disadvantage against many internet sellers that are not required to collect sales tax on goods sold in the state.
One of the Missouri Chamber’s legislative priorities this year is supporting policy to require internet retailers doing business in Missouri to collect the tax, regardless of whether the retailer has a physical presence in the state — which will put brick-and-mortar businesses back onto an even playing field with online sellers. This change would not create a new tax; it would simply apply Missouri’s existing sales and use tax fairly.
The concept, often referred to as “Wayfair,” comes in response to a 2018 U.S. Supreme Court ruling in South Dakota v. Wayfair, which determined that economic nexus rather than physical nexus was all that is needed to require collection of sales taxes. Missouri is one of the few states with a sales tax that has not passed such a law.
There are several measures under consideration in the Capitol this year that include this important change for restoring fairness to Missouri businesses. What elected officials are differing on, however, is how the resulting revenue ought to be used.
Gov. Mike Parson has proposed using the revenue first to address emergency assistance and then infrastructure and debt obligations if fund balances reach certain levels. A few legislators are sponsoring bills aimed at making the online tax collection revenue-neutral by adjusting other taxes, while some lawmakers are saying the money should be used to fund needs like education and transportation.
The Missouri Chamber is closely watching all legislation related to online sales tax implementation and supports adopting a responsible framework for collection of sales tax from out-of-state sellers in response to the Wayfair decision, as outlined in our 2020 Legislative Agenda. The Missouri Chamber recommends that remote sellers be taxed only if they meet or exceed a threshold of $100,000 or more in sales of tangible personal property from outside Missouri to a destination within Missouri, to minimize the administrative burden on both the sellers and the Missouri Department of Revenue.
Questions about online sales tax? Contact Matt Panik at mpanik@mochamber.com or (573) 634-3511.
