Columbia continues to lose major tax revenue to internet sales

4 months 2 weeks 2 days ago October 11, 2016 Oct 11, 2016 Tuesday, October 11 2016 Tuesday, October 11, 2016 1:26:00 PM CDT in News
By: Lauren Donovan, KOMU 8 News

COLUMBIA - Columbia continues to lose out on major tax revenue due to an increase in the popularity of online shopping. 

Online retailers do not have to charge a sales tax to shoppers in states where the business holds no physical presence. Big online retailers like Amazon capitalize on this tax hole. 

Cha Boutique, a fashion retailer in downtown Columbia, has seen a recent up tick in out-of-state customers online. Jennifer Pestle is the store manager of the boutique. Online sales do not dominate the store's sales, but to remain competitive in the market she said they have worked to offer more of their products to consumers online. 

"I think that online is always growing. I mean, I think people love to shop online its so easy," Pestle said. 

The sales tax makes up 28 percent of the city's total revenue, an estimated $23.8 million for 2016. These funds go to an array of public services including law enforcement and the fire department. 

"Well just about everything, with very few exceptions is funded in the fire department through sales tax... so it really has a huge impact on the services we provide" Columbia Fire Chief Brad Frazier said. 

Columbia was recently named the fourth largest city in Missouri. "The population is growing, the calls for service for the fire department are going up and our staffing has stayed the same. We are seeing our resources spread thinner," Frazier said. 

Columbia currently has a sales tax of 9 percent, 2 percent of which actually goes to the city. Missouri as a state has a highly complex tax system with more jurisdictions than any other state but Texas. 

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