Sales Tax Policy Hobbles Web Entrepreneurs

Photo courtesy of Creative Commons
Photo courtesy of Creative Commons

Web entrepreneurs are getting squeezed by a tax law passed by the Legislature this spring that says an online retailer must collect sales tax if it gets “business referrals” from an affiliate in Missouri. Amazon decided that rather than collecting the tax when the law takes effect next week, it won’t pay commissions to any Missouri associates. For example, the policy will hurt a Chesterfield entrepreneur who was counting on commission revenue from Amazon to help get his book-discussion site off the ground. In Missouri, a fiscal note estimates that the new tax law will collect $10 million a year. That’s a tiny fraction of the $468 million that one University of Missouri study said the state misses out on from untaxed online sales.

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