Waiting on Parson's Wayfair signature

It took nearly three years since a landmark U.S. Supreme Court ruling made it possible, but a Missouri "Wayfair" sales tax on online purchases will start to be collected in January 2023, with only Gov. Mike Parson's signature necessary to set the wheels in motion to make the levy a reality.

Wayfair passed both houses of the state's General Assembly in the legislative session, which concluded May 14.

"(The governor) and his administration are reviewing all (approved) bills very thoroughly (and) an online use tax would even the playing field for Missouri's bricks and mortar businesses," said Kelli Jones, Parson's deputy communications director, in an email to the Southeast Missourian on Thursday, adding Parson has until mid-July to pen his name to all bills reaching his desk.

Missouri will become the last U.S. state to approve the tax on Internet sales.

Parson identified passing a Wayfair bill to be top priority in his 2021 State of the State address delivered January 27 in Jefferson City.

"As one of the last states to have Wayfair legislation, it was essential for us ... to level the playing field for Missouri businesses," said the bill's sponsor, state Sen. Andrew Koenig (R-St. Louis County), adding, "Missouri had one of the worst things you could have in a tax code by incentivizing Missourians to purchase from out-of-state businesses."

All area lawmakers in the Missouri House -- Wayne Wallingford of Cape Girardeau, Jamie Burger of Benton, Barry Hovis of Whitewater and Rick Francis of Perryville -- voted "yes" on the final Wayfair package, which the lower chamber approved overwhelmingly 145-6.

Freshman state Sen. Holly Rehder of Scott City (R-27), whose district represents Bollinger, Cape Girardeau, Madison, Perry, Scott and Wayne counties, voted no.

Rehder restated her opposition Thursday.

"Small businesses in our area are telling me they would have to spend more money to comply with big government under this bill, so it grows government's size substantially just for the management, while costing our small business owners more money than they will make from it just to comply," said Rehder, who took office in the General Assembly's upper chamber in January after eight years in the Missouri House.

"The end result appears to shake out as more taxes from us just to pay for more bureaucracy," she added.

History

On June 21, 2018, in a 5-4 decision, the Supreme Court of the United States (SCOTUS) said individual states may mandate businesses with an economic presence within their boundaries to collect and remit taxes on remote sales.

The high court set a threshold on any taxed entity, requiring at least 200 transactions or $100,000 in-state sales.

Prior to the ruling, taxes could only be collected on Internet sales with those businesses maintaining a physical presence in the state -- meaning, for example, companies such as Amazon were largely exempted.

SCOTUS said it was "unsound and incorrect" to require a physical presence to trigger taxation, according to a letter sent to clients of the American Institute of Certified Public Accountants.

Wayfair explained

Wayfair is the name of an online retailer, one of three petitioners in the South Dakota v. Wayfair SCOTUS case, which unsuccessfully challenged the Mount Rushmore State's law requiring out-of-state retailers to collect sales tax. Overstock.com and Newegg were the other companies named in the court filing.

The Wayfair bill on Parson's desk also includes provisions eliminating the income tax on COVID-19 stimulus funds, creation of an urban agricultural zone fund, decreasing video service provider fees to settle at 2.5% of gross receipts by 2027 and implementation of a voluntary firefighter cancer benefits trust, according to the Missouri Times.