Columbia losing revenue as state collects first Cyber Monday Amazon sales tax
COLUMBIA - Cyber Monday could set a sales record, but Columbia will not see much, if any, revenue from it.
Amazon began charging sales tax for Missouri in February, so this Cyber Monday is the first time the state could benefit. Columbia will not though, since the city will not get any money from this surge in online shopping.
The city tried to get about $1 million dollars from taxes on online purchases through the use tax proposal, but it failed earlier this month for the third time. The use tax would have collected city sales tax when people spent more than $2,000 out-of-state.
Second Ward Council Member Michael Trapp said online sales undermine Columbia's finances. The city made budget cuts to increase revenue, because sales tax growth has steadily declined since the 2011 fiscal year. In 2011, sales tax growth came in at 5.8 percent compared to a projected 1 percent growth for 2018. Third ward council member Karl Skala has previously attributed this decline to online sales.
“Just because someone makes their purchases from an out-of-state provider instead of a local brick-and-mortar shop doesn’t mean that they shouldn’t pay for police and fire and parks like folks who are shopping at the mom and pop stores in Columbia," Trapp said.
He said he does not expect more revenue in the near future since the proposal failed, but said the city will have to make more cuts if nothing changes.
“Ultimately, we’re going to have to begin cutting some popular programs,” Trapp said.
Local stores need to respond, he said.
"Stores are going to have to adapt to the changing realities," he said.
Amazon is responsible for about 43 percent of online sales in Missouri, according to past reporting. KOMU 8 reached out to the Department of Revenue to see how Cyber Monday's sales could affect the state, but has not received any information back as of Monday night.