Columbia points to increased online shopping for lack of sales tax revenue

Columbia interim City Manager John Glascock points to the increase in online shopping as the cause of the continued decrease of local sales tax revenue.

The estimated loss from the past 10 years has gone up steadily, and he projects that the city will lose $5.7 million in 2020 alone. From FY 2010 till FY 2019, the city estimates it has lost $17.2 million in revenue due to online shopping.

The city also estimates it will lose 1.75% for FY 2020, or about $400,000 from the general fund. In his message on Friday, Glascock said that equates to roughly the cost of adding four police officers or four firefighters.

Glascock says this lack of revenue is what is keeping the city from “fairly compensating employees, adding public safety personnel, increasing street maintenance funding and increasing services to residents.”

Owner of Yellow Dog Book Shop in downtown Columbia, Joe Chevalier, said that online shopping has impacted his business since he opened, “I do imagine some people find it easier to click a button rather than come to the shop and look around.”​​​​​​

“When you shop local, even if you are paying sales tax that money goes to your community,” Chevalier said. “And it’s going things like maintain parks, removing snow in the winter and all the many other great things local taxes get put to.”

Glascock presented the idea of adding a new city use tax on online purchases, among other new taxes. Those taxes will require voter approval and are only being discussed right now.