Missouri online sales tax bill would lower levy rates in tandem with revenue increase
(The Center Square) — In the wake of 2018’s South Dakota v. Wayfair Supreme Court ruling, all 45 states in the nation that levy sales taxes adopted measures to collect them from online retailers.
All, that is, but two — Florida and Missouri.
Both state legislatures during their 2021 sessions will, again, consider bills seeking to essentially pick up money left on the table in assembling Fiscal Year 2022 budgets withered by pandemic-induced revenue shortfalls.
Florida lawmakers will consider a measure to legally mandate online retailers that sell at least 200 items or $100,000 worth of items collect and remit the state’s 6% sales tax, which could generate an estimated $500 million annually to state coffers.
Missouri legislators will debate proposed legislation that would require online retailers that sell $100,000 worth of items collect and remit the state’s 4-percent sales tax, which could generate $142.5 million for the state and $138.6 million for local governments annually, according to a 2019 estimate.
But House Bill 554, filed by Rep. John Eggleston, R-Marysville, and Senate Bill 97, sponsored by Sen. Denny Hoskins, R-Warrensburg, are companion bills that vary significantly from Florida’s online sales tax-collection bill.
Neither include a transaction threshold and both incorporate a scale that reduces state and local sales tax rates in tandem with rising receipts from online collections.
HB 554 passed through its first hearing Wednesday before the House Ways & Means Committee. SB 97 makes its debut hearing Thursday before the Senate Ways & Means Committee.
The companion measures also differ from Florida proposals in that Missouri Gov. Mike Parson has vociferously endorsed the measure while Gov. Ron DeSantis has been silent on the issue.
During an online meeting Wednesday with Missouri Mayors United, the governor reiterated a call he made in his State-of-the-State address last month: “Pass the dang bill.”
“We gotta get that done. We ought to put a lot of pressure on legislators,” Parson said. “I know the argument up here is going to be who gets the money? How you going to spend the money? And all of that stuff. All I’m telling them is ‘pass the dang bill’ and at least start collecting the money. We’ll fight over where that money goes some other day, but even the playing field for business people.”
The bills require the state’s Department of Revenue (DOR) to adjust the state’s sales tax rate downward, beginning in 2023, to produce substantially the same amount of revenue as the sales tax did prior to the expansion to remote sellers.
They read: “Beginning January 1, 2023, this act reduces such rate by an amount to be determined under an agreement between the Director of Revenue and the State Treasurer and shall be an amount that is substantially equivalent to the use tax collections made under the provisions of this act during the 2022 calendar year.”
The proposals would absolve remote sellers of liability in the event of database errors and, proponents say, avoids “the pitfalls associated with including a transaction threshold, which can require filing and payment obligations on incredibly low dollar amounts for small sales.”
According to Washington, D.C.-based Tax Foundation, online shopping constituted more than 20 percent of all 2020 retail sales, a significant spike from 2018’s 15.8 percent.
Disclaimer: This content is distributed by The Center Square