Wayfair paves the way for Missouri businesses
On Wednesday June 30th, Governor Parson signed Senate Law 153. Commonly referred to as the Wayfair Bill, SB 153 requires online merchants to collect sales tax on all Missouri consumer internet purchases. Our current tax law only requires online merchants with a physical location in Missouri to collect sales tax. This legislation extends that requirement to all online merchants who make more than $ 100,000 annually from purchases from consumers in Missouri.
The COVID-19 pandemic was devastating for all Missourians, but especially for our state’s businesses. Even before the pandemic, our businesses struggled to compete with online retailers – and the closings caused by the pandemic only made it worse. By eliminating sales tax, consumers have been encouraged to buy from online retailers, often direct competitors of Missouri businesses. From a tax policy perspective, SB 153 creates the conditions for local companies to compete with foreign online companies.
This law also creates the Missouri Working Family Tax Credit Act, a state income tax credit (EITC) that provides tax breaks for low-income workers.
SB 153 calls for further cuts in the state income tax rate if state revenues continue to grow. Current law allows the state income tax rate to be reduced by 0.5% in 0.1% increments if certain revenue triggers are met. In addition to the existing cuts, Senate Bill 153 provides for three further cuts of 0.1%, which results in a possible total income tax cut of 0.8%.
In addition, SB 153 includes Senate Bill 22, which prevents your tax dollars from being used to fund risky development projects in floodplain areas. This legislation prohibits new development projects from using TIF in areas designated by the Federal Emergency Management Agency (FEMA) as floodplain and prohibits new TIF projects in “greenfields” which are agricultural land outside the city limits or areas that are essentially surrounded by land with agricultural zoning. This legislation also requires that local projects applying for TIF submit a study by a land use planner, town planner, licensed architect, licensed commercial real estate appraiser, or licensed attorney describing how the area meets the criteria required to qualify for TIF . It is important to note that this legislation does not end development in floodplain areas, but rather uses your tax dollars on risky private developments. Incentivizing taxpayers’ money to be used in floodplains is bad policy. If a developer wants to play and build in a floodplain, they should take all the risk – not the taxpayer.
I would like to thank Governor Parson for signing this critical piece of legislation. I believe this is one of the best ways to support our local businesses and make sure they stand a chance against online retailers. I worked for years to get this bill passed and I am proud of the hard work my colleagues and I have done to get this bill across the legislative finish line.
Sen. Koenig with Gov. Parson signing the contract for SB 153.