Government, local retailers frustrated over loss of sales tax on Cyber Monday


by Russell Kinsaul / News 4

Posted on November 26, 2012 at 5:02 PM

Updated Monday, Nov 26 at 9:56 PM

ST. LOUIS ( -- Cyber Monday sales are estimated to reach $1.5 billion.

Most online sales are tax free; which saves consumersmoney, but local and state governments are missing out on hundreds of millions of dollars in tax revenue.

Following a 1992 supreme court ruling, only when an online retailers has a physical presence in a state is it required to collect sales taxes on purchases made in that state.

Missouri and Illinois are virtually powerless to change the system but there’s a bi-partisan movement to level the playing field between online sellers and brick and mortar stores.

Nicole Seifret took time during her lunch hour at the marketing agency Switch to shop online.

“It’s a lot easier than fighting the crowds on Black Friday,” she said.

In an era of tighter government budgets, there’s growing focus on the sales taxes that go uncollected.

It’s estimated Illinois is missing out on over a billion dollars a year in sales taxes. In Missouri upwards of $400 million.

News 4 asked MoDOT what it could do with that amount of money and the list was long.

Officials cited replacing deficient bridges, adding shoulders to highways, and even begining preliminary work on eventual rebuild of Interstate 70 as projects that could use funding.  

Owners of brick and mortar stores that are required to pay local taxes say it’s the fair thing to do.

“Online retailers have an unfair advantage,” said John Kistler of J&B Technologies. “They can undercut our prices by not charging taxes.”

Local stores also say the online retailers rely on airports, highways, bridges and railroads to deliver their products and they should collect taxes to contribute to building and maintaining them.


There’s growing support for legislation proposed in congress that would require sales taxes collected on all online purchases, there are only certain times it’s added in currently.


If the bill passes it will be in part thanks to Missouri and Illinois leaders. The co-author of the legislation is Senator Roy Blunt of Missouri and Illinois Senator Dick Durbin has been an extremely vocal supporter of the bill.