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Amazon to collect 4 percent state sales tax in Missouri beginning Wednesday

Posted: 4:00 PM, Jan 31, 2017
Updated: 2017-01-31 18:20:00-05

Like many Kansas City brick and mortars, Toy Time , an independently owned toy store at Crown Center , has a hard time competing with online giant, Amazon

"People will come in here and they will see a product and then they will instantly get on their phone and they will Google search it and they will look to see if they can get it cheaper somewhere else," explained Toy Time store manager Kendra Puterbaugh.

But now, for the first time, Amazon is doing something in Missouri that it's been doing in other states since 1995. Beginning Wednesday it will start collecting state sales tax in the Show-Me State'. 

RELATED: Amazon sales cost Missouri more than $60 million, study says

"It is going to bring in much-needed revenue and create a bit of equity for brick-and-mortar retailers," said David Overfelt, the president of the Missouri Retailers Association

Amazon and its subsidiaries already collect sales tax on merchandise shipped to more than 30 states. Now, it will collect just over 4% for all orders shipped to cities in Missouri.

"It goes toward a number of services that need to be funded and people expect to have," explained Overfelt. "There is a service somewhere in the state that everyone relies on. It might be different for every voter and taxpayer but I guarantee you that 3 percent is funding something that the taxpayer or voter uses every day or every week."

Just how much the state will make off this change remains to be seen -- but it could be a hefty amount. A University of Tennessee study from a few years ago estimated the state loses $187 million a year by not taxing online sales.

Kansas already collects 6% state sales tax on Amazon purchases.

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