Lawmakers in Missouri are considering passing legislation which would enforce remote seller obligations in 2022.
The bill, Senate Bill 97, will require that the state tax rate must be lowered beginning in 2023. The Department of Revenue will be building and managing a database for tax rates and jurisdictions. The system would be able to remove liability from sellers in situations where there is a database error.
“The bill requires sellers to collect and remit sales taxes if they surpassed $100,000 in Missouri sales in a year, avoiding the pitfalls associated with including a transaction threshold, which can require filing and payment obligations on incredibly low dollar amounts for small sales,” Tax Foundation reported.
Joe Bishop-Henchman, vice president of Tax Policy & Litigation at National Taxpayers Union Foundation, outlined some of the implications of the bill.
“The key thing to keep in mind is that state taxes that impermissibly burden interstate commerce are unconstitutional,” Bishop-Henchman told the St. Louis Record. “In the Wayfair decision in 2018, the Supreme Court evaluated a South Dakota law taxing internet sales but excluding sellers ‘who transact only limited business in South Dakota’ which that state set at less than $100,000 in sales or fewer than 200 transactions. Since the Court upheld the South Dakota law, virtually every other state has copied that threshold since there's some assurance it wouldn't unconstitutionally burden interstate commerce.”
Bishop-Henchman explained that Missouri is home to many local sales taxes and that the state is not part of the Streamlined Sales Tax Project, an interstate compact with definitions and procedures that are standard, across the board.
“Missouri has not become a member of that effort and doing so would make compliance easier for all retailers, since Missouri definitions and rules wouldn't be different from everyone else's,” Bishop-Henchman said.
Missouri may see lower tax rates beginning in 2023, but it is not likely that they will be large decreases.