It’s a 13 billion dollar question – whether online shoppers should be paying sales tax. And in some cases, you may already owe tax money you don’t even know about.
Right now the Supreme Court is considering the issue. The justices could open the door to requiring retail sales tax on the web, a loss to states estimated at $13 billion dollars a year. Supporters say it levels the playing field while opponents say that’s an unfair burden for virtual shops.
“We’ve bought some shoes and some batteries, picture frames, coffee,” says Scott Narrell.
Scott Narrell of Joplin does a lot of his shopping at his laptop.
“Just about anything, whatever we need. Shop online and get it shipped to the house in a day or two,” says Narrell.
He says sales tax isn’t a big concern – but he does notice it on some purchases.
“Yes we get charged sales tax,” says Narrell.
But where Narrell and other shoppers spend that extra few cents is hit or miss. The state of Missouri gets the tax revenue – if it’s an online retailer like Amazon with a physical presence in the state. But Jasper County and the city of Joplin don’t benefit – they haven’t yet gotten voter approval to charge the tax. The city of Webb City has.
“It started in the $5,000 and $10,000 and recently it’s been growing up to $30,000,” says Carl Francis.
The city of Flags is on a short list of those in southwest Missouri benefitting from online shopping. Carterville has it. Joplin is considering asking voters for it. But voters in Carl Junction turned it down.
“There are very few that have been able to get the ballot measure passed that is required for online sales tax,” says Francis.
And even when they do, the impact is limited – not every online business charges sales tax. That could change with a US Supreme Court case. South Dakota vs. Wayfair pits a state wanting a universal online tax against a successful web-based furniture retailer that doesn’t want to charge it.
“I’ve heard the complaints from online sales companies that say it’s going to be complicated for them. It’s complicated for our local brick and mortar companies too,” says Francis.
Jan Workman knows all about juggling tax rates. The Webb City business owner started out selling T-shirts from her Alba home.
“And I have to pay just Jasper County sales tax,” says Jan Workman.
Sales at the Cool School Shoppe include the Webb City tax, and occasionally, she sets up at a Joplin based market.
“And so that’s another sales tax rate,” says Workman.
But a universal online tax would take that to another level. It’s estimated there are 12 thousand taxing districts nation, which Workman sees as a sales tax headache.
“So if they could help you it would be great. For me as small as I do, I probably would just eliminate it and stick to my in-store,” says Workman.
But for shopper Scott Narrell, he has no plans to take his shopping list off the web.
“I think there should be sales tax on it,” says Scott Narrell.
And you may already owe for your digital purchases. Missouri requires residents who spend more than $2,000 online to pay use taxes directly to the state.