Online retailers didn’t need much of a push to continue grabbing a bigger share of market. They got it anyway when lockdowns and stay-at-home orders closed brick-and-mortar stores across the country. Now, local businesses are trying to recover and governments are bracing for a sharp decline in sales tax revenue.
In Missouri, the budget impact could be even worse. That’s because Missouri is among the few states that didn’t take advantage of a U.S. Supreme Court ruling that opens the door to a tax on internet sales.
The 2018 South Dakota v. Wayfair ruling allows states to collect and remit sales taxes collected from retail businesses that lack a physical presence in that state. Of the states that already allow a sales tax, all but Florida and Missouri have an “economic nexus law,” which allows them to collect an online tax if sales exceed a certain level.
The Missouri Department of Revenue projects that a tax on e-commerce could bring in as much as $145 million in revenue, though that’s a moving target and some legislative proposals include income tax cuts as an offset. Retailers who are just emerging from the shutdown believe an online tax is necessary, not just to shore up budgets but to boost brick-and-mortar stores that are reeling.
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By: Greg Kozol
May 09, 2020