Online sales tax is the law of the land in Missouri. But no one will see the money until 2023
JEFFERSON CITY – Missouri will be the last state in the country to begin collecting sales tax on online purchases. The state will not see the revenues arrive until January 2023.
Governor Mike Parson signed the bill last week, but it will be 18 months before the Revenue Department begins collecting taxes online. This is due to an outdated computer system and software which will require more time to speed up new procedures.
“It’s frustrating,” said David Overfelt, president of the Missouri Retailers Association. “Their system is so run down that they can’t just instantly flip the switch and start getting remote, out-of-state retailers outside of our borders to start collecting. “
The measure will put Missouri on a par with other states that collect sales taxes for products purchased online. For years, online shoppers have been able to avoid sales tax and get a lower price by taking their business out of physical stores and going online.
“When it takes effect, it will help all retailers in Missouri, not just those with a storefront,” Overfelt said. “If you have an internet business and you sell nationwide, now you have to collect nationwide, but your competition doesn’t have to collect in Missouri. “
The legality of the imposition of such taxes was upheld by the United States Supreme Court in South Dakota v. Wayfair in 2018. Since then, states have passed laws to collect the tax. Missouri was the last state to do so.
“It was a top priority for us, and we felt there was a way forward throughout the year to get there,” Parson said when signing the bill last week. “At the start of the session, we wonder if he will cross the finish line, but we have had a very good year.
Previous attempts to pass the sales tax online have failed because some lawmakers did not want to pass the tax unless it comes with tax cuts. The law was successful this year in part because it was added to a bill that lowered the state’s top tax rate.
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