If there is one thing that is overdue in the state of Missouri it is to correct a serious wrong — a free ride given to out-of-state retailers who do not have to collect sales taxes on online purchases.
This injustice puts Missouri retailers at a huge disadvantage since they have to collect sales taxes. Consumers are dollar-conscious and any savings they can make they will.
Gov. Mike Parson said he wants a law passed enabling the state to collect millions of dollars of new tax revenue from out-of-state retailers who sell to Missouri residents. The governor said such a law will be on his agenda when the 2019 legislative session begins in January. The added tax revenue could help fund other items on the governor’s agenda, such as infrastructure projects and workforce development.
The Supreme Court in June upheld a South Dakota law to collect sales taxes from out-of-state retailers who sell products online. The decision overturned a decades-old precedent that businesses without a physical presence in a state — such as a store, office or warehouse — didn’t have to collect sales taxes on behalf of the state. Technically, the customers were responsible for paying the tax, but there was no way to enforce such a rule.
According to the Associated Press, some large retailers such as Amazon have been collecting sales taxes for all 45 states that charge them.
The governor said a state law enabling online sales tax collections would generate an estimated $100 million to $150 million annually for the state.
Missouri now charges a 4.225 percent sales tax. Other entities, including counties and cities, and other local jurisdictions, tack on their own sales taxes. The AP said total sales taxes reach as high as 11.697 percent in some St. Louis community and transportation development districts.
At least 29 other states already have implemented laws to collect sales taxes from “remote” retailers or will be doing so in January or February, according to the National Conference of State Legislatures, the AP reported.
It’s really a fairness issue. The competition from out-of-state online companies is huge. Missouri retailers should not be put at a disadvantage in sales.
We hope lawmakers will support Gov. Parson in passing a law to enable the state and local entities to realize sales taxes from out-of-state retailers.