“There she stands, proud in all her glory.” Missouri County Record Spring 2010 New Madrid County Courthouse, New Madrid, MO • Streamlined Sales Tax - p. 2 • BRO Monies Restored - p. 7 • Clay County Website Recognized - p. 12 • Social Media, The Law, And You - p. 14 • Statewide 9-1-1 Systems Survey - p. 22 • Ruling Affects Phelps County - p. 30 Is Missouri Missing Money? 2010 Board Of Directors By Jennifer Muzinic, Springfield Business Journal Reporter President Eva Danner, Livingston Co. President-Elect Jack Adams, Iron Co. 2nd VP Debbi McGinnis, Polk Co. As Missouri Gov. Jay Nixon scrambles to cut millions from the budget, 3rd VP Dave Coonrod, Greene Co. tax analysts believe more than $300 million in tax dollars owed the state Treasurer Rodger Reedy, Benton Co. in 2010 won’t ever be collected. Past President Peggy McGaugh, Carroll Co. The reason? Remote sales, or those Missouri residents make outside Mark Hedrick, St. Fancois County the state via Web, catalog or telephone transactions. Carol Green, Phelps County Like most states, Missouri’s tax system does not specifically track and Tom Dirnberger, Scott County Becky Schofield, Dallas County collect on remote sales taxes. Two bills in the state General Assembly are Susette Taylor, Atchison County working to change that, largely due to the booming e-commerce industry. Scot Van Meter, Buchanan County Dan Hausman, Buchanan County Streamlined Sales Tax Lisa Pope, Platte County State Senate Bill 905, called the Streamlined Sales Tax Bill, and Betty Knight, Platte County Tom Brandom, Clay County House Bill 2302 cover the same ground: bringing Missouri’s state and lo- Ed Quick, Clay County cal sales taxes in line with the 23 states participating in the Streamlined Michael Sanders, Jackson County Sales and Use Tax Agreement. By signing on to the agreement, Missouri Curtis Koons, Jackson County would simplify its tax laws to create a uniform system for retailers to col- Mike Whelan, Monroe County lect sales taxes for state and local governments. Ken Pearson, Boone County Missouri Budget Project Executive Director Amy Blouin said a change Pat Lensmeyer, Boone County Nelson Heil, Carroll County is necessary if the state wishes to tap into tax dollars that already should Mark Reynolds, Johnson County be collected from state residents shopping online with out-of-state retail- Cher Caudel, Moniteau County ers. Shelley Harvey, Audrain County “Most people just aren’t aware that there is a use tax they’re supposed Ann Schroeder, Franklin County to be paying,” Blouin said. “This just makes it so when you go online and Sharon Birkman, Franklin County buy a book over the Internet, you’re paying the same taxes you’d pay when Charlie Dooley, St. Louis County Ed Kemp, Jefferson County you went to your neighborhood brick-and-mortar store.” Charles Dean, Phelps County Companies with a physical presence in the state already collect and Gene Oakley, Carter County pay a 4.225 percent tax on remote sales. Since Missouri can’t require an Rodney Richardet, Perry County out-of-state company to collect sales tax, the burden falls on the individual Sharron Payne, Butler County or company making the purchase to pay Missouri’s use tax, also a 4.225 Gary Youngblood, Barry County Richard Struckhoff, Greene County percent charge. Brenda Day, Wright County Bonnie McCord, Vernon County Correction: Darieus Adams, Jasper County In the Winter 2009 edition of the Missouri County Record, MAC pub- Stephen Holt, Jasper County lished an article titled, “Missouri Residents Get A History Lesson.” The Jerry Reynolds, Cape Girardeau County article was authored by the Missouri Humanities Council, not the Gerald Jones, Cape Girardeau County Missouri Historical Society, as written in the byline. Carolyn Loraine, Camden County Linda Sweatt, Camden County Chris Wrigley, Cole County Marvin Register, Cole County Pam Shipley, Cass County The Missouri Brian Baker, Cass County James Strahan, Taney County County Record Vol. 16, No. 1 Jim Strafuss, Taney County Donald Kritzer, Callaway County A Publication Of The Missouri Association Of Counties Ken Dillon, Callaway County 516 East Capitol Avenue, PO Box 234, Jefferson City, MO 65102-0234 Terry Nichols, Iron County Telephone: (573) 634-2120 Fax: (573) 634-3549 Rita Milam, Scott County www.mocounties.com Cherie Mason, Lafayette County Dick Burke, Executive Director Mary Ellen Brennan, Assistant Director Laura Pope, McDonald County Bev Cunningham, Insurance/Business Manager Cindy Wells, Finance and Operations Manager David Erwin, Adair County Charles Harrison, Administrative Assistant Grace Toebben, Administrative Assistant Louella Pryor, Morgan County Bob Holthaus, Loss Prevention Coordinator Jay Shipman, Communications Assistant Charles Heiss, Johnson County Marsha Abbott, Henry County The Missouri Association of Counties, founded in 1972, is a nonprofit corporation and lobbying alliance of county elected and administrative officials who work to improve services for Missouri taxpayers. The board of directors meets Teresa Moore, Lafayette County on the third Wednesday of designated months in Jefferson City to promote passage of priority bills and monitor other Lenora Hyder, Newton County legislation before the state General Assembly and the United States Congress. The Missouri County Record is pro- Moniteau County John Kay, duced four times annually by the association staff. Subscription rates for non-association members are $15 per year Karen Miller, Boone County prepaid. Rates for association members are included in membership service fees. All articles, photographs and graph- Ron Houseman, Stone County ics contained herein are the property of the association and may not be reproduced or published without permission. Don Troutman, Texas County Advertising rates are available upon request. 2 www.mocounties.com “The obligation is on us to keep problem, he said, is that interstate 23 and counting track of everything we haven’t paid sales tax is too complicated. Already, 23 states – including sales tax on,” said Scott Peterson, “A retailer would have to know Arkansas, Kansas and Kentucky – executive director for Nashville, that one state collected taxes for A, have signed the agreement. Until Tenn.-based Streamlined Sales Tax B, C, and D, while maybe a local vendors are required to collect sales Governing Board, which serves as government only required sales tax tax from other states, however, the central agency for the states to be paid on A, B and C,” Peterson companies that sell products or ser- participating in the Streamlined said. vices online aren’t overly concerned. Sales and Use Tax Agreement. That’s where the streamlined Kristin Parker, who works in “The problem is, the use tax is only sales and use tax project comes the accounts receivable department as good as the people who volun- into play. The solution, though, is at Springfield-based Everything tarily remit it.” less than simple. The Streamlined Kitchens LLC, 1920 W. Woodland Entering the agreement won’t Sales and Use Tax Agreement, St., said the company generated change the self-reporting imposition which is 10 years in the making, $8.6 million in revenues in 2009, of the use tax, but proponents say it outlines the steps for state use tax with the majority of business com- would counteract retailers’ objec- systems in a 170-page document. ing from Web sales. Parker said tions that paying taxes to multiple “Just in Missouri, we have state only 3 percent of that revenue came states is too complicated. tax rates and local tax rates. So from Missouri residents, meaning According to Peterson, par- companies had a stronger argu- the remainder of kitchen supply ticipating in the agreement won’t ment, before the streamlined project and appliance sales was absent require companies to collect or re- of certain state sales taxes. She port sales taxes due. But if enough was developed, that online collec- leaves it to the company’s software states participate, the board and tions for sales in other states would program to calculate that tax. its backers could have firepower be- be too difficult and too cumber- “If it’s a Missouri customer, it hind a long-term goal of convincing some,” Blouin said. “The project Congress to adopt a law giving all actually provides the mechanism to will add sales tax,” Parker said. states authority to require retailers help retailers determine rates.” “Otherwise, it doesn’t.” to collect sales tax, he said. If the Missouri bills pass, the Only about 5 percent of Stock- state’s sales and use tax laws ton-based Hammons Products Co.’s Fear The Web would comply with the stream- business is retail, including catalog According to a study from the lined tax agreement. State and and Internet sales, President Brian University of Tennessee, $344.5 local taxes would need to have the Hammons said. The company also million in Missouri use taxes won’t same exemptions and adopt specific relies on software to calculate taxes, be collected in 2010. By 2012, the definitions, such as “food,” “lease and Hammons expects an updated study projects that $430.2 million or rental” and “purchase price,” ac- software package would accom- will pass by the state’s coffers as a cording to the Senate bill. (Continued On Page 6) result of uncollected remote sales. While those estimates include all purchases subject to sales and use tax, the Internet is the venue that stands to produce the most tax dollars. Nationwide e-commerce sales, including business-to-business such as professional services, topped $2.3 trillion in 2006, up from $995 billion in 1999, the study points out. In a separate study, eMarketer Inc. expects online retail sales to increase by an average of 10 percent each year the next three years, grow- ing to $189.3 billion in 2013. The only way for states to col- lect on 100 percent of that money, Peterson said, is to address 1992 Supreme Court rulings – Bellas Hess v.