The biggest accomplishment of my legislative career has to be finally passing the Wayfair bill that includes a big income tax cut for our citizens. “Wayfair” is the nickname of an internet sales tax to collect a tax on internet purchases that are not already being taxed. It’s called “Wayfair” after a 2018 Supreme Court case where Wayfair.com, NewEgg.com, and Overstock.com sued South Dakota over a similar law passed in that state. Ironically, Wayfair lost the case, but gained tons of name-ID for their web site.
Web sites that have physical stores like Walmart.com and HomeDepot.com are already collecting sales tax on their sites’ purchases, as are some purchases on Amazon, but web sites with no Missouri stores were not. Because of the passage of the Wayfair bill, in 2023 all web sites will charge and collect Missouri sales tax. This primarily affects purchases on sites like Ebay and Etsy, and helps level the playing field for our Missouri stores to better compete against the internet’s e-retailers and hopefully will drive more sales to our hometown businesses.
Local cities and counties that have passed a voter approved use tax will see increases in their tax revenue from the Wayfair bill. About 2/3 of Missouri counties and 1/3 of Missouri cities have passed this local use tax. Local governments that have not passed a local use tax will need to do so before seeing any financial gains. Of course, any local use tax increase will come from the pockets of citizens in the affected communities.
To offset the increased sales/use taxes, Missourians will see lower income taxes. In 2024, Missouri income tax will drop for all citizens who pay income tax. Additional cuts will be available to those in the lower income range. By approximately 2030, the bill will drop Missouri income tax some more. Once fully enacted, these cuts will save Missourians approximately $300-400 million per year in income taxes. Because the cuts are triggered by other revenue growth, the Wayfair bill will provide income tax relief to our citizens while still prudently financing the needs of our state budget.
Senator Andrew Koenig and I have both worked extensively over the last three years on the Wayfair bill and are happy to finally have this legislative task accomplished. The bill now awaits Governor Parson’s signature. Since he has named Wayfair as an important priority, it is expected the governor will sign the bill before the mid-July deadline.
Until next time, health, happiness and prosperity to you and your family.