Rep. J. Eggleston’s bill, HB 548, would reduce the top income tax rate by 0.14 percent on January 1, 2020, while implementing a 4.225 percent sales tax on internet transactions for businesses that meet the minimum threshold.
“The goal is to help our brick and mortar stores — from the big box stores all the way down to the mom-and-pop stores on Main Street — to better compete with their out-of-state internet counterparts without it being a fiscal drain to Missourians and without it being a big fiscal note or any decrease to revenue to both state and local government,” said Eggleston.
States collecting internet sale taxes from out-of-state retailers has been a much-debated issue in recent years. The legality of the issue was ruled on by the United States Supreme Court in June 2018. In South Dakota v. Wayfair, the nation’s high court determined that states could impose a tax on goods purchased from out-of-state sellers, even if the seller does not have a physical presence in the taxing state.
President and CEO of Associated Industries of Missouri, Ray McCarty said they support internet sales tax in general but noted a few changes could improve the measure.
“We have started it off with estimates from experts who think they know how much more we will get from the internet, so we have modeled the income tax cut to mirror that,” said Eggleston. “It should be revenue neutral. But if it is off, we have a mechanism in the bill for two years after it passes to adjust those income tax rates, higher or lower, depending on if the internet sales tax generates more or less than the estimate.”
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