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Missouri finally addresses tax advantage held by out-of-state internet sellers


June 30, 2021 - Governor Parson today signed the so-called "Wayfair" legislation into law, making Missouri the very last state in the United States to apply state and local use taxes to internet sales by companies located outside the state with no physical location in Missouri.


Associated Industries of Missouri (AIM) was instrumental in passing the bill and it has been a top priority of the organization for several years. Lobbyist Chuck Pierce and AIM President and CEO Ray McCarty were on hand for the official signing ceremony.


"Today, Governor Mike Parson signed SB 153 & 97 into law, allowing state and local jurisdictions to collect an online use tax that will help protect Missouri's small businesses," said Senator Andrew Koenig, sponsor of the legislation. "As one of the last states in the nation to have Wayfair legislation, it was essential to finally pass this legislation for Missouri businesses and deliver a $380 million income tax cut to working Missourians. Under our current tax code, only online merchants with a physical presence in Missouri are required to collect sales tax on purchases made by Missourians. Unfortunately, this incentivizes consumers to buy their products online or from out-of-state merchants instead of shopping locally or in Missouri. This legislation requires all online retailers to collect sales tax on internet purchases made by Missouri consumers. This legislation will level the playing field for our local businesses and vendors competing with online out-of-state businesses," he said.


Representative J. Eggleston, handler of the bill in the Missouri House of Representatives had this to say:

"This tax reform bill helps so many Missourians in so many different ways. The owners and employees of our Missouri businesses can now better compete with their online competitors. Missouri's income tax rate will eventually drop to 4.8%, which is a 20% reduction from the 6.0% rate imposed just a few years ago. Some city and county governments will see increased revenues so they can fill more potholes and hire more police officers. Cable TV customers in the urban areas will see the taxes on their cable bills lowered. Retail businesses in rural areas will be able to get some of the same tax advantages that normally go only to urban factories. And no Missourians will pay income tax on their stimulus payments. Lots of good policy improvements for a lot of Missourians, and I'm happy it is now official."


McCarty applauded the signing of the bill today.


"We thank Governor Parson for signing the bill today," said McCarty. "This bill represents many, many long hours over several years and extremely strong leadership by Sen. Koenig and Rep. Eggleston, who earned the trust of the members of their respective chambers and were able to level the playing field for Missouri businesses and give Missourians an income tax cut as a result. And I believe it would not have been possible without the numerous long hours and hard work of Chuck Pierce and the respect he has earned from all elected officials," he said.


The bill's Wayfair provisions will be effective January 1, 2023. Click HERE for a link to SB 153 and HERE for the summary.

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