Missouri Joined the Rest of the Country in Enacting “Wayfair Tax”

Missouri joined the rest of the country in enacting a sales tax on online purchases, commonly known as a “Wayfair tax,” when Governor Parsons signed Senate Bill 153 into law. The governor identified the Wayfair tax as a priority in his 2021 State of the State Address. The Wayfair tax will begin in Missouri on January 1, 2023.

Previously, Missouri businesses who made online sales to Missouri customers were required to charge sales and use tax, while companies without a physical presence in Missouri who made online sales to Missouri customers were not.  The new law allows Missouri to impose a sales tax on online purchases made through vendors such as Etsy, eBay, and Wayfair, that are delivered to the state.

The Wayfair tax is intended to even out the playing field for local businesses to compete with online companies. It is also expected to raise up to $41 million for public schools, $5 million for the Missouri Department of Conservation, and $4.5 million for state parks and soil conservation.

States have been quick to pass legislation establishing an economic nexus or a taxable threshold on online sales since 2018, when the U.S. Supreme Court held in Dakota v. Wayfair, Inc. that states are permitted to collect taxes on remote sales.  Previously, states could only collect tax on transactions with businesses who maintained a physical presence in the state.  Missouri was the last state to enact a Wayfair tax.

Click here to read Senate Bill 153 in its entirety.

Posted by Attorney Katherine M. Flett. Flett is a member of the litigation team whose primary focus is on assisting clients in insurance defense, business litigation, employment law, and bankruptcy matters.