It has been debated whether or not a web sales tax in the United States should be considered. In a previous speech, the governor of Missouri, Jeremiah W. “Jay” Nixon, stated that he would un-veto the web sales tax bill and opt to add the provision if, and only if, someone could prove that enforcing sales tax collection by internet retailers would increase the state revenue.

Furthermore, the bill that Nixon vetoed actually supported two measures that were created to increase the collection of sales tax by web and catalog retailers, such as a multi-state “Streamlined Sales and Use Tax Agreement,” which had already been agreed upon by twenty-four states to modify sales tax laws in an effort to make it easier for retailers to collect tax across the states.

The bill also included the federal “Marketplace Fairness Act” that was passed in March. As a result, the act would grant states the authority to mandate sales tax collection by Internet and catalog retailers with $1 million (USD) or more in annual sales to states where they aren’t already required by law to collect sales tax. Under current federal law, states can mandate sales tax collection only by retailers with an in-state, physical presence like stores or distribution centers.

Nixon, in his veto, strongly pointed out that the provision in the bill calls for a 0.5% cut in the state’s maximum income tax rates, which coincides with the enactment of the Marketplace Fairness Act. As a result, the 0.5% cut would amount to a loss in state revenue of $300 million per year and it will triple the amount to $900 million in lost revenue three years prior. This is not something that the governor wants to support unless someone could prove that it would actually boost state revenue.

Would you want to pay web sales tax if it boosted state revenue or are you satisfied with the veto? We’d love to hear your opinions!