While the U.S. Supreme Court decision in South Dakota v. Wayfair, Inc. allows a state to tax out-of-state vendor purchases even when the seller does not have a brick and mortar presence in the taxing state, only Missouri and Florida don’t assess the tax. That could soon change if Senate Bill (SB)153 is approved.
“It's putting our brick and mortar businesses at a disadvantage online and it puts a burden on Missouri businesses,” said Ross Lien, director of legislative affairs with the Missouri Chamber of Commerce & Industry. “It's important that we collect that additional revenue for the state at a time where the budget is a little uncertain for the next few years because of COVID and other things.”
SB153, which passed the Senate, is scheduled for a hearing this week on April 14 before the House Ways and Means Committee, according to the Missouri Senate website.
The House version of SB 153 is HB 554, which passed the House last month and already had a Senate hearing.
“There's quite a bit of support and they both passed their original chambers overwhelmingly so I think there is a really good shot that we get the Wayfair bill done this year,” Lien told the St. Louis Record.
The difference between the two bills, according to media reports, is that it would be up to local municipalities to hold a vote on the use tax under HB 554 even if approved by voters while SB 153 requires the collection of the tax.
SB 153 would create a cash operating expense fund in which to deposit the money collected.
“The chamber thinks it's important to know exactly how much we're bringing in and we pass the bill and start collecting, we don't really have a great idea of what that number looks like,” Lien said in an interview. “Then we can figure out what to do with the money from there, whether it's an offsetting tax cut or if the money will go to specific programs like disaster relief, infrastructure, or whatever the legislature chooses to do with it.”
Regarding how much money the state has been missing out on, Lien said it's unknown.
"There have been estimates of anywhere from as low as $50 million to as high as 250 million," he said.
SB 153 would include vendors that had cumulative gross receipts of $100,000 or more from the sale of tangible personal property for the purpose of storage, use, or consumption, and sellers meeting the threshold would be required to collect and remit the use tax.