Local government, business leaders hope for Wayfair legislation this year

Only two U.S. states do not tax internet sales: Missouri and Florida.

Business and government leaders contacted by the Southeast Missourian said they believe it is time to get it done.

Bob Fox

Cape Girardeau Mayor Bob Fox said he is hopeful the state legislature will tackle the issue in a special session this summer.

“Gov. (Mike) Parson is supportive of Wayfair (legislation),” said Fox, “but we can’t get the bill to the floor for passage.”

If approved, Wayfair would allow a use tax to be placed on any internet purchase that is brought into or shipped into Missouri.

According to the Missouri Times, Parson announced in December a use tax could generate $60 million to $80 million annually for unanticipated emergencies and for highway and other infrastructure maintenance and construction.

The coronavirus outbreak, with the resultant chilling effect it has had on the economy, might qualify as an emergency, Fox said.

Cape Girardeau’s sales tax revenue is already down 2%, he said, pointing out the city started the year with a million-dollar deficit.

Missouri does collect a limited use tax but only on companies with a physical presence in the state, which substantially reduces the benefit to local municipalities, Fox said.

“If you purchase something from Walmart and the order is sent to you directly from an out-of-state manufacturer, we get nothing from the transaction,” added Fox, who notes Amazon sales are currently exempt from use tax.

Wayfair has been stalled in the General Assembly for several sessions, and voters in the City of Cape Girardeau did not pass a use tax in 2016. Jackson voters not passed one three times — in 2014, 2016 and 2019.

Brian Gerau

“We need an online sales tax, a user tax, period,” Jackson Area Chamber of Commerce executive director Brian Gerau told the monthly meeting of Southeast Missouri Realtors this week.

“Please call your state representative,” Gerau added. “We need this.”

Kathy Swan

State Rep. Kathy Swan of Cape Girardeau said it is time to listen to the people on the ground who understand the local economy.

“Homegrown businesses are really feeling the lack of a use tax,” said Swan, who is term-limited in the House and is running this year for the Missouri Senate.

Swan said she believes the General Assembly will be called to Jefferson City for a special session this summer.

“We haven’t been summoned for the summer yet,” Swan said, “but I expect we will be, and we’ll probably be focusing (just) on the budget.

“We need to figure out how to spend the full $2.379 billion in stimulus money from the federal government,” added Swan, referring to the Coronavirus Aid, Relief and Economic Security (CARES) Act.

Fox is part of a 300-member group, Missouri Mayors United.

The consensus of the mayors, Fox said, is “get a bill passed.”

“We want the legislature to bring Wayfair bill to the floor,” said Fox, “and perhaps this can happen in a special session.

“(Wayfair) is not a tax on our citizens,” he said.

“I’m afraid the long shutdown will change the way people shop forever,” said Fox, who said he hopes a state-passed tax on internet sales may make it easier for local municipalities to persuade their voters to give approval in the future.

Fox, a local dentist who took office in 2018, noted the city has given what he termed as long overdue raises to municipal employees the past two fiscal years.

“It was a 2% increase in 2019-20 and a 1% hike in 2020-21,” Fox said.

“With a city receiving most of its revenue from sales tax, when it drops, there are only so many places you can cut,” added Fox, who said the city’s parks and recreation department has raised fees again and the police and fire departments are charging for false alarms.

“Thanks for do-it-yourself projects people are doing during the shutdown,” Fox said, “stores such as Menards and Lowe’s are seeing gangbuster sales.

“But this will drop off in time. With an internet tax, a use tax, we wouldn’t be in as bad of a (financial) crisis.”

Cape Girardeau County has a 1% use tax on the books, but the levy is devoted entirely to paying off the bonds needed for the new county courthouse, which is expected to open shortly.

Bollinger and Perry counties also have a use tax, as do the area municipalities of Chaffee, Advance, Dexter, Perryville and Ste. Genevieve.