Missouri Losing as Much as $600 Million in Sales Tax Revenue
ST. LOUIS October 16, 2019 - According to a report released today by the Faith
Justice and Truth Project, Missouri is losing $575 million to over $600 million a year in
sales taxes because of untaxed e-commerce sales that otherwise would have been taxable
if purchased in a store with a physical presence in the state. If the growth of e-commerce
sales continues at a similar pace, then Missouri e-commerce sales tax losses could soon
easily exceed $800 million.
Missouri enacted an e-commerce click-through nexus law in 2003, but it is one of the
only states in the country that has not enacted a more stringent law to collect more e-
commerce-oriented sales tax via the United States Supreme Court’s Wayfair decision.
Missouri could capture a significant portion of this lost revenue if it updates its
treatment of e-commerce and other remote seller sales.
A large portion of the Missouri’s sales tax erosion is the result changing consumer
behavior which has shifted spending habits to e-commerce sales that have gone
untaxed. In 2018, Missouri residents paid almost 20% less in sales tax as a percentage
of personal income in 2018 as compared to years in the last decade.
Civic leaders, including the St. Louis Chapter of the NAACP called for action in the 2020
legislative session to enact an online sales tax in Missouri.
“When shopping habits change and the most affluent consumers are able to purchase
products tax free over the internet, Missouri’s sales tax becomes increasingly regressive,
said Rev. Billy Honor, Executive Director of the Faith Justice and Truth Project. “Rural
consumers and communities of color that find themselves on the wrong side of the
digital divide end up paying the lion share of sales taxes and that’s not right.”
“This report makes it clear that an e-commerce sales tax is not a new tax. It is money
that used to be collected by the State of Missouri and continues to be due under the law.
Failing to collect it punishes small businesses,” said Adolphus Pruitt, President of the St.
Louis Chapter of the NAACP.
The report also finds that some of the largest retailers in Missouri are under collecting
sales taxes. Walmart, the Missouri’s largest retail collector of sales tax is estimated is
estimated to be under-collecting sales tax for in-store sales by as much as $63 million.
When combined with lost revenue from sales on Walmart.com the retailer may be
responsible up to $117 million in lost sales tax revenue annually.
“I can compete against Walmart on a fair playing field, but when Walmart offers in-store
and online products at an artificial discount because it isn’t paying its share of taxes, my
business is put at a huge disadvantage” said Steve Ripper, owner of Southside
Further attention to e-commerce and sales tax compliance issues are warranted if
Missouri leaders wish to recoup the same level of sales taxes relative to personal income
as they have in the past.
The full report is available online at: www.FaithJusticeTruth.org