Hopefully, this will be the year the Missouri Legislature evens the sales tax playing field.
Before adjourning for spring break, the House and Senate advanced competing bills to require out-of-state online businesses to collect sales taxes on purchases by Missourians. The requirement would only apply to businesses that make at least $100,000 a year in online sales to Missouri residents, the Associated Press reported.
For years, we've said the current sales tax structure is uneven and unfair because Missouri hasn't adjusted it for the advent of the internet a quarter-century ago.
As a result, Missouri collects sales and use taxes on e-commerce transactions only from businesses that have a physical location in the state, as well as a few out-of-state businesses that take it upon themselves to collect and pay the taxes.
That creates a couple of problems. First, it makes for an uneven playing field between brick-and-mortar businesses and online businesses.
Meanwhile, customers technically are responsible for paying their own sales tax. But without an enforcement mechanism, that's likely a rare occurrence.
The other problem is that Missouri isn't getting all of the revenue for an existing tax. The AP reported Department of Revenue officials estimated the change would bring in as much as $190 million in state revenue by 2027 and another $70,000 in local tax revenue.
Both versions of the bill would partly offset the revenue increase with slight income tax cuts.
The measure has been proposed for years, but Republicans have been hesitant to "add" a tax, even one that's already on the books.
We applaud Gov. Mike Parson for backing the issue. The AP reported he recently said: "I simply want to start making the playing field fair for our Missouri businesses that have to compete with out-of-state businesses."
Passing this measure just makes sense, and it would show Missourians that bipartisanship does still exist.
News Tribune