Times have changed.
We no longer buy our groceries at the corner store, get our shoes repaired at the cobbler or our horses shod at the blacksmith.
Now we drive across town to a supermarket or discount club, buy a new pair of shoes when they get too worn, and get our car repaired instead of our horse shod — paying sales tax to each with our purchase of goods or services.
And we check out deals on the Internet — often minus a state sales tax — before we bother to drive to the mall.
That change could potentially cost Missouri $1.4 billion in tax revenue over four years if we don’t also change the way we collect those taxes. That is what a study released by MU’s Harry S Truman School of Public Affairs Institute of Public Policy has determined.
With schools needing funds, universities facing raises in tuition, roads and bridges going unfixed, children and family services begging for funds, and politicians looking for ways to raise money without raising taxes, it is disturbing that we are losing that kind of revenue by not collecting taxes that are already on the books.
The problem is that the law has failed to keep up with society and its increasing dependence on Internet traffic and trade. The U.S. Supreme Court ruled in 1992 that purchases made from businesses not in the state cannot be taxed by the buyer’s state unless the business has a bricks and mortar presence in that state.
That ruling was made well before e-commerce became the booming business it is today, but what the court said is important because the justices pointed out that the burden of a business computing, collecting and disbursing sales tax for every state must be addressed.
That means Congress, not the Missouri legislature, is in the best position to fix the problem — for Missouri and the other states. Sen. Roy Blunt, R-Missouri, is one of 10 senators to co-sponsor the Marketplace Fairness Act, which would give states the authority to collect taxes from online retailers. The act would also work toward simplifying state sales tax laws to lessen the burden on Internet retailers.
It is probably not surprising to learn that Congress has yet to consider the act or that some of the most strident anti-tax lawmakers in Washington, D.C., consider such an action the same as adding a tax — which it is not.
We encourage Blunt and other lawmakers to push for the Marketplace Fairness Act so that online retailers are playing by the same rules as those who sell out of a store or even those who sell out of a warehouse in the buyer’s state.
It’s only fair, and $1.4 billion could go a long way to resolving some of Missouri’s financial woes.
Copyright Springfield News-Leader. Reprinted with permission.