Missouri lawmakers renew call for Internet sales tax

JEFFERSON CITY, Mo. -- Kelly von Plonski's bookstore is struggling to keep its doors open.

Sales at Subterranean Books, located two miles from Washington University in St. Louis, were down 25 percent in January. The recent economic downturn hurt sales, but von Plonski says the biggest burden on the store is the 9.4 percent sales tax it must pay to the city and the state -- that its online rivals avoid.

"It's the absolute main reason," she said. "Hands down, no question."

Subterranean's online competitors do not have to pay sales taxes because a 1992 decision by the U.S. Supreme Court held that states cannot force companies to pay sales or use taxes unless they have a physical presence in the state.

Some Missouri lawmakers are backing legislation to let Missouri go around that decision by joining an agreement with 24 other states that makes it easier for companies to voluntarily pay sales tax on Internet purchases. If enacted, the measure could generate up to $210 million for Missouri's cash-strapped budget. But it has little chance of passing, because lawmakers fear a political backlash from tax-averse voters.

Reps. Margo McNeil, D-Florissant, and Rory Ellinger, D-University City, have filed bills to have Missouri join the Streamlined Sales and Use Tax Agreement.

The House Tax Reform Committee heard public testimony on both bills earlier this month. The chairman, Rep. Doug Funderburk, R-St. Peters, said the merchants should be paying the tax and that the state needs the money. But he said the bills won't move beyond the committee this legislative session.

"It's not going to go to the floor -- at least not this year," he said.

He said the proposal could have dire political consequences, even if the state's benefits from it could total in the nine figures.

"Regardless of what's the reality, someone is going to try to use that against you in an upcoming election -- that you voted for a tax increase," he said.

Von Plonski and Miller both agreed that customers might have to pay more online if the tax were collected. But they said those tax dollars help cities provide services many people value.

"The sales tax is what pays for our fire department and our police officers," Miller said. "I hate taxes just as much as the next person, but I know that we have to have a strong tax base in order to be a thriving community."

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Internet sales tax bills are HB52 and HB278

Online:

Legislature: http://www.moga.mo.gov