According to the Missouri Budget Project, Missouri faces another $700 million shortfall in its general revenue budget in Fiscal Year 2012 which begins in July. After adjusting for inflation, general revenue is actually 12 percent lower than it was a decade ago. The result is that the legislature has made significant cuts to critical services during the last decade, and the trend is likely to continue.
The erosion of state services has no end in sight as the legislature continues to choose cuts over responsible revenue increases. But, there is one revenue issue that has increasing bi-partisan support because it is not a new tax, and could have significant results for state revenue. It is the "streamlined sales and use tax agreement".
Twenty-four states have already done it, including our neighbors: Kansas, Nebraska and Arkansas. The "streamlined sales tax" is a mechanism that would allow Missouri to capture sales tax from purchases made through online retailers. It's the same sales tax that Missourians currently pay at our bricks and mortar stores, but online retailers have largely refused to collect. And, failure to capture this sales tax is estimated to cost Missouri $210 million in state and local revenue in 2012.
In Missouri we expect equity in our tax structure. We expect that when we pay sales tax on an item at a retail location, that our neighbor would pay the same state sales tax at a different retail location. However, with online stores, the sales tax is often either not collected at all or it may be going to a different state. If not addressed, as online retail continues to grow, sales tax will continue to decline.
Not only would the "streamlined sales tax" plug this growing hole in the state sales tax structure, it would level the playing field for Missouri's local "bricks and mortar" merchants.
While not the entire solution for Missouri's budget struggles, the streamlined sales tax would be a step forward and would help Missouri to invest in health care, education, social and public services, transportation, and other services that the state provides.
Members of Women's Voices have unanimously endorsed a position paper calling for Missouri to adopt the Streamlined Sales and Use Tax Agreement. Read our position paper; then contact the office of your state legislators and urge the passage of HB 278. (You may get a copy of the bill by going to www.house.mo.gov and writing 'hb278' in the search box). The Advocacy Team also contacted the members of the Tax Reform Committee and House Speaker Steve Tilley prior to the bill's hearing on Febuary 16, speaking to the importance of the issue. We understand the bill was well received.
The next step is to get the bill out of committee. We are, again, contacting the members of the Committee and Speaker Tilley. You can help by writing them about the importance of bringing this legislation to the Floor.
WV members Joanne Kelly, Ruth Ann Cioci, Mary Clemons, Ruth Ehresman, and Barbara Finch met with State Senator John Lamping on Monday, March 21, and enjoyed a frank and wide-ranging discussion on a variety of financial issues. Regarding the streamlined sales tax, Senator Lamping is in favor of this bill. He told us that "most people in the legislature don't understand what it is" and he hopes to educate them by introducing several pieces of legislation during the remainder of his term. "I hope that the candidates for governor in our next election will make this issue a part of their campaign platform," he said. "It's one way people can learn about the streamlined sales tax, but it will take political courage to do this."
Close Loophole On Taxing Internet Purchases
Letter to the Editor in the Webster-Kirkwood Times July 1, 2011
Don Corrigan's June 24 article pointed out the debate among our state legislators about how to best pay for state programs. Increasing the sales tax on cigarettes and taxing Internet sales are potential revenue sources that Missouri has yet to endorse. As the previous sentence shows, the dreaded "tax" word has been mentioned twice.
But collecting taxes on Internet sales is a bi-partisan issue. The chair of the House Tax Reform Committee, Republican Rep. Funderburk presented a bill to collect these revenues. This is not a Democrat vs. Republican debate. And our neighbors in Kansas, Iowa, Nebraska, Oklahoma and Tennessee are among the 24 states collecting taxes on Internet sales.
Corrigan's article indicated that Sen. Lembke said he has not heard a lot from local businesses about the need to tax Internet sales. Perhaps this is the call for our Webster-Kirkwod businesses to speak out. The local business owners in University City Loop held a press conference in March and called on the legislature to enforce sales tax collection. They made it quite clear that they are losing business to Internet sellers.
My organization has taken a position on this issue and has met with Republicans and Democrats to encourage passage of this streamlined sales tax to bring a fairness to our local brick and mortar retailers. This is not a new tax. Missourians are supposed to voluntarily declare and pay taxes on Internet purchases. Let's close this loophole, collect the taxes due and bring tax fairness to Missouri.
Mary Clemons, President, Women's Voices Raised for Social Justice
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