There is bipartisan support in the Missouri House for collecting taxes on internet sales, but there is disagreement over whether the state should make any money on the deal.
Representatives Doug Funderburk (R-St. Peters) and Margo McNeil (D-Florissant) have both presented bills to the House Committee on Tax Reform that would enter Missouri into the multi-state Streamlined Sales and Use Tax Agreement. Twenty-four states are a part of that agreement so far, and the legislatures in others are considering bills to join.
Funderburk and McNeil agree the collection of taxes on internet sales would level the playing field for Missouri businesses. McNeil says they are, “being undermined by the antiquated tax system we have that was written in the 1930s and hasn’t taken into consideration the internet.”
The two differ over whether to make the change revenue-neutral to the state. Funderburk says it should be. “The people that I’m working with in trying to get this to the floor, and to a vote, and hopefully one day to the Governor’s desk, we want to make sure, especially in this down economy, that we’re not asking Missourians to pay more taxes than they’re currently paying today.”
Funderburk does not know how he might accomplish his goal yet, however. He explains one idea that has been floated, “taking each year’s collected revenue via the Streamlined Use and Sales Tax and applying it to a lowering of the overall sales tax of the next year.” He says if that idea does not seem feasible, “we’re going to have to look for other avenues.”
McNeil says to not bring in additional state revenue would be to miss an opportunity. “Local cities and counties have a big hole in their revenue bucket, but also the state of Missouri has a large hole in our revenue bucket that is only going to get wider as more people decide to use the internet.”
The disagreement mirrors the philosophical difference in opinion that has been stated and re-stated this session between the Republicans in the House, who have said they do not want to increase taxes, and Democrats who say a new revenue source is necessary to balance the budget.
McNeil says, “I think I’m relatively safe in saying my Democratic colleagues are in favor of it staying as a source of revenue in the state of Missouri.
She adds, however, she will not rule out voting for a bill that is revenue-neutral. “There are good reasons to support this bill other than bringing in revenue to the State of Missouri because our local businesses are being undermined and they are going out of business.”
Funderburk, who chairs the Tax Reform Committee, hopes to have legislation ready for a vote in the next two weeks.
AUDIO: Mike Lear reports (1:00)