Last week’s Cyber Monday sales set records.
According to com.Score online purchases soared to $1.735 billion which is an increase of over 18 percent from last year.
But something else occurred on Cyber Monday which didn’t receive nearly as much fanfare as the shattering of single-day online sales records but could be just as significant to some cash-strapped states like Missouri.
The U.S. Supreme Court quietly dismissed an appeal by two giant online retailers, Amazon.com and Overstock.com Inc., which challenged a New York law that forced the two companies to collect sales tax from customers in that state.
The state statute at issue required sales tax collection by online retailers that use New York-based affiliates, which are companies whose websites link shoppers to online retailers.
The two online retailers argued the law, upheld by New York’s top court, violated the Constitution’s Commerce Clause by demanding tax collection from businesses that don’t have facilities or a “physical presence” in the state.
By declining to hear the case, the Supreme Court essentially cleared the way for states like Missouri to pass similar laws to collect millions of dollars in additional tax revenue every year from online purchases.
Missouri should follow New York’s lead and enact similar legislation. Our state has missed out on an estimated $259 million in annual sales tax every year during the past decade. That missed revenue number is only going to rise. E-commerce isn’t a fad, it is reality.
Republicans, who control the Missouri General Assembly, understandably shudder at the notion of new taxes. But they are just as offended when government treats some groups differently than others. They are incensed when government picks “winners and losers.”
That is the case with the application of Missouri sales tax which is not applied to most online sales by the big retailers like Amazon.com. Missouri should treat both online and brick-and-mortar retailers equally. It’s a question of fairness.
States lose an estimated $23 billion a year in uncollected sales taxes from web retailers. The Supreme Court’s recent decision should be the impetus for Congress to pass The Marketplace Fairness Act, which already has cleared the U.S. Senate.
The legislation would require states that decide to levy Internet taxes to either join existing Internet sales tax agreements or create their own system that adheres to federal guidelines.
The House needs to pass this law and bring some clarity to the issue of levying Internet sales taxes.