July 30, 2014

Uncollected internet sales tax costing Missouri millions (AUDIO)

The Monday after Thanksgiving, better known as “Cyber Monday” was the biggest online sales date ever. While the numbers proved to be high, many states, including Missouri have no effective means of collecting a tax on those sales it’s largely attributed to people choosing to shop online rather than shop in stores.

Research Assistant at the University of Missouri Andrew Weseman says more people are choosing to shop online rather than at actual stores. And Federal law and U.S. Supreme Court rulings only allow states to impose a sales tax on a business that has a physical store in the state.

 “So for example, while Wal-Mart has a physical presence in the state and the purchases that are made online are subject to taxation,” he says. “However, Amazon for example, because they don’t have a physical store in the state, cannot be taxed by the state of Missouri.”

He says his study on the uncollected tax is based on annual figures rather than seasonal. “So we don’t have specifics for the different cyclical losses that could possibly be attributed to the holidays,” he says.

The state lost approximately $468 million annually in sales tax revenue in the last decade, and the number is expected to rise in the future.

AUDIO: Mary Farucci reports. (1:00)