State lawmakers and small business owners are renewing their efforts in the upcoming legislative session to require the collection of sales tax on Internet purchases.
Press Release from the Missouri News Service
Some state lawmakers and small-business owners are renewing their efforts in the upcoming legislative session to require the collection of sales tax on Internet purchases.
More people shopped online this holiday season, and initial research shows that convenience and price were part of the reason. It’s estimated that Missouri will lose out on nearly $188 million from uncollected taxes on Internet sales this year.
Small-business advocates such as the Greater Kansas City Chamber of Commerce are among supporters of collecting the tax. Mike Sutherland, a consultant at Missouri Budget Project, says not doing so hurts small businesses in the Show Me State.
“Missouri small businesses are the base of our economy, and in many communities they’re really the vitality of a community. I think there’s a recognition that our tax code is putting those retail businesses and communities at a disadvantage to out-of-state businesses.”
Similar efforts in past years have failed. By law, consumers are required to pay to the state a ‘use tax’ on non-taxed purchases that they make through mail-order or online. States cannot force companies to pay sales or “use tax” unless they have a physical presence in the state.
While consumers are always looking to save a few dollars, Sutherland says they also see the big economic picture of what small businesses mean to their community.
“They’re recognizing there’s a competitive disadvantage to bricks and mortar, businesses to those that are remote sellers or out-of-state, and there’s also recognition there’s an erosion to the tax base.”
Twenty-four other states already collect sales tax on Internet purchases. U.S. Sen. Roy Blunt, R-Mo., is co-sponsoring a similar bill, the Marketplace Fairness Act, on the federal level.