On Wednesday, June 30, during a ceremony at the State Capitol, Missouri Governor Mike Parson signed Senate Bills 153 and 97 into law, allowing Missouri and local jurisdictions to collect an online use tax that will help protect Missouri's brick and mortar businesses.
"Passing Wayfair legislation has been a top priority of my administration, and we are happy to be signing this critical legislation into law today," Parson said. "This law will help even the playing field between Missouri small businesses and large out-of-state retailers. With more than 570,000 small businesses in the state of Missouri, it is time that we establish a 21st century tax code that benefits our Main Street businesses rather than companies that don't invest in our communities or employ our citizens."
In 2018, the U.S. Supreme Court's decision in South Dakota v. Wayfair, Inc. allowed states to adopt rules to collect sales and use taxes from business not physically located in their state but who sell and deliver products into the state.
SB 153 and 97 will allow Missouri and local jurisdictions to collect a use tax from online retailers who sell and deliver more than $100,000 in tangible goods to consumers in the state annually.
Collection and remittance obligations will begin on January 1, 2023. Sales and uses taxes cannot be retroactive and will be collected by the Missouri Department of Revenue. Following 49 other states and Washington D.C., Missouri will be the final state to implement an economic nexus law since the Supreme Court's decision in 2018.
At this time, Missouri businesses lose sales because out-of-state, online retailers are not subject to the same state sales tax laws that local businesses are. The current system also burdens Missouri businesses because they are required to remit sales and use taxes to other states, but out-of-state businesses selling to Missourians do not.
"This legislation is many years in the making and long overdue in the state of Missouri," Parson said. "This is a big win for our state and our small businesses, and we appreciate Senator Koenig and Representative Eggleston for prioritizing this legislation and working tirelessly to find agreement and get it passed."