JEFFERSON CITY, Mo. — With the second half of the legislative session underway, a couple of Republican senators are determined to progress legislation establishing an internet sales tax before May.
Sen. Sandy Crawford’s bill — which she calls “still a work in progress” — would enforce a use tax for online purchases with the help of the Department of Revenue (DOR) or a Certified Service Provider (CSP). Working with outside groups and Senate colleagues, Crawford said she chose to push for a use tax as opposed to a sales tax to counter what she contends is an unfair advantage online marketplaces have over brick-and-mortar stores in Missouri.
The Missouri DOR classifies a sales tax as imposable on retail sales of tangible property and certain services. On the other hand, a use tax is defined by the DOR as imposed directly on the storage, use, or consumption of the property in the state. It is not applicable if the item is purchased at a Missouri retailer and otherwise subjected to the state’s sales tax.
“I think it’s especially important for our brick and mortar businesses across the state,” Crawford told The Missouri Times. “They’re at an unfair advantage. If you order something online, you don’t pay sales tax on it for the most part (there are some exceptions). It’s not really fair [and] it just puts them at an unfair advantage.”
Crawford said she’s worked with fellow Republican Sen. Andrew Koenig on her SB 189 — although she’s content if it’s not her bill with her name that ultimately passes through the legislature. Koenig, too, has worked this legislative session on bills pertaining to an internet tax.
Koenig’s plan — SB 46 — would collect the revenue from internet sales and use it to cut income taxes — which he referred to as “the most destructive tax known to man.”
“The reality is, all these taxes are owed today, and we’re in a situation where we have millions of Missourians who are breaking our tax code because theoretically, they’d have to remit that sales tax or use tax on their own and virtually nobody does,” Koenig told The Missouri Times. “That’s a clear problem in the law. It’s bad to have millions of Missourians breaking Missouri’s tax law on a daily basis.”
“One way to fix this is to require the marketplace facilitators to begin collecting the tax through the use tax,” he continued. “We’d take that revenue that we would get and cut the income tax with it.”
So far, 30 states nationwide collect internet sales tax, according to recent data from the National Conference of State Legislatures.
Crawford maintained “everyone is pretty engaged” in trying to come up with a legislative plan that will make it over the finish line.
“We are closer than we ever have been to getting this passed and agreeing on language,” she said.
SB 46 sits on the Senate’s informal perfection calendar; SB 189 is on the formal calendar for perfection.
In the House, Rep. J. Eggleston’s bill pertaining to an internet sales tax was perfected Tuesday afternoon. It requires one more vote before it can head to the Senate.
Eggleston’s bill would reduce the top income tax rate by 0.14 percent while implementing a 4.225 percent sales tax on internet transactions for businesses that meet the minimum threshold.
Kaitlyn Schallhorn is a reporter with The Missouri Times. She joined the newspaper in March 2019 after working as a reporter for Fox News in New York City. Throughout her career, Kaitlyn has covered political campaigns across the U.S. and humanitarian aid efforts in Africa. She is a native of Missouri who studied journalism at Winthrop University in South Carolina. Contact Kaitlyn at email@example.com.