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Wayfair tax bills pass out of both chambers — but with some differences

  

JEFFERSON CITY, Mo. — Both the House and the Senate passed versions of a Wayfair tax Thursday, moving the legislative priority forward as session reached its midpoint.

SB 153 from Sen. Andrew Koenig and Rep. J. Eggleston’s HB 554 would both allow the state to impose a sales tax on online purchases made through vendors with a physical presence in the state, a practice adopted by 43 other states so far. 

“Right now, without Wayfair, we have an incentive for people to make purchases from non-Missouri businesses,” Koenig told reporters Thursday. “Just from a tax standpoint, that’s one of the worst things you can have in tax code.”

Both versions were perfected earlier this week with little in the way of opposition. 

“This bill has come a long way,” Eggleston said. “I want to thank everybody for helping us get this to the point where we could agree on a way to help our small businesses throughout the state.”

The Senate passed its version by a vote of 28 to 4, while the House’s vote count was 96 to 59.

The Senate version broadens the definition of “engaging in business activities within the state” and requires a use tax to be collected. The House version would allow local governments to subject online retailers to a use tax if voters in the area approve such a measure. Both bills also cut the individual income tax. 

Koenig said the legislators would work together to reconcile the differences between the bills. 

“I think if the House bill comes over here, we’re going to have to make it look like the bill that we passed out,” Koenig said. “There are some problems with the mechanics of how the House bill works, so I’m hopeful to work with Rep. Eggleston and hopefully convince him that what we did is better.”

Gov. Mike Parson identified the tax as a priority this session, hoping to bolster the state’s economy through ever-increasing online commerce. He said he was happy to see it move toward his desk.

“I’m just thankful they passed it in some form, some fashion,” Parson told reporters. “I know the argument always comes in of how are we going to spend the money or how do you make it revenue neutral, but I just want to start making the playing field fair for Missouri businesses that have to compete with out-of-state businesses. If there’s ever a time to do it, it’s this year.” 

Not all Missourians are keen on the proposition; agriculture-based mail order business owner Paul Hamby recently decried the possible fallout on small businesses and argued the tax would make the marketplace less fair and reduce competition.

Internet tax laws have passed in many states over the past couple of years following 2018’s South Dakota v. Wayfair, Inc., in which the U.S. Supreme Court said states could collect taxes on remote sales. Previously, states could only collect tax on transactions with businesses maintaining a physical presence in the state. Since the verdict, many states have passed their own legislation establishing an economic nexus, or a taxable threshold on online sales.