sales tax Archives - Missourinet

Legislature puts sales tax increase for transportation to MO voters

May 14, 2014 By Mike Lear

The state legislature is asking Missouri voters if they want to raise the state sales tax to support transportation.

The Senate changed the proposal from a 1-cent sales tax increase to a three-fourths-of-one-cent increase and sent it to the House 22-10. The House on Wednesday approved that 105-43, meaning it will go on the statewide ballot in November unless Governor Nixon sets a special election date for it.

If passed it would generate an estimated $534-million dollars annually, running for ten years beginning in 2015.

The proposal is HJR 68

The Missouri Department of Transportation has said it will soon not have the money for road and bridge maintenance. It has already quit adding new projects to its five-year construction program and suspended a cost-share program, in which the Department split the cost of a project with local governments in the area it would impact.

The Department’s Director, Dave Nichols, issued a statement praising passage of the proposed amendment.

Nichols writes, “Today is a great day for the future of transportation in Missouri. I would like to thank the General Assembly for passing this important legislation that gives Missourians the opportunity to improve our economy and keep our families safe by investing in much-needed transportation improvements.

“We are working with planning partners around the state and representatives from every mode of transportation to determine how this new revenue could best improve our total transportation system. We are ready to deliver the projects and services that Missourians expect and deserve.”

House version of tax reform legislation passed

April 25, 2013 By Mike Lear

The House has passed its version of legislation Republicans hope will level the playing field for Missouri among neighboring states. The proposal would cut income taxes for individuals and businesses will increasing the state sales tax.

Representative Andrew Koenig (photo courtesy; Missouri House Communications)

Estimates from legislative researchers say the plan would eventually cut state revenue by $438 million annually. The changes wouldn’t kick in unless state revenue collections grow by at least $100 million year-to-year.

See the legislation, SB 26.

Representative Judy Morgan (D-Kansas City) and other Democrats say the bill will hurt the poor by shifting the tax burden.

“The reduction of the personal and corporate and business income tax, increase of the sales tax, guess who’s going to benefit from that. Not the people that make less than $33,000 a year. They will pay more in taxes because of the sales taxes and the people who will benefit will be millionaires.”

The House handler of the bill, Representative Andrew Koenig (R-Manchester) says the claims the bill will hurt the poor are “false” and “scare tactics.”

“In this bill there’s a $2000 deduction on income tax. We have a sales tax code that is laced with exemptions on the basic necessities of life … on food, gasoline, mortgage, rent, etcetera.”

The plan would cut the top personal income tax rate by two-thirds of a percent over five years. The corporate income tax would be gradually reduced by three-quarters of a percent, while a new 50 percent deduction would be phased in for business income reported on owners’ individual tax returns.

Personal deductions on individual income taxes for those with incomes under $20,000 annually would nearly double and the first $25,000 of corporate income from taxation would be exempted.

The sales tax would be gradually increased by three-fifths of a cent to pay for roads and education. The plan would set aside part of that increase to pay to replace the Missouri State Mental Hospital in Fulton. An amendment added on the House floor would also send part of the increase in sales revenue to the state’s schools.

The House version of the plan includes tax amnesty language that its budget writers and Governor Jay Nixon assume the passage of to balance their budget proposals.

The package passed the House 90-68, well short of the support needed to overturn a veto by the Governor who has opposed an earlier version of the bill. 19 Republicans voted with Democrats against it.

It goes back to the Senate.

Missouri Municipal League on failure, future of out-of-state vehicle sales tax

September 14, 2012 By Mike Lear

One of the organizations that helped develop and supported HB 1329 in the last legislative session says it will try another piece of legislation in the 2013 session.

The Missouri Municipal League expects another bill dealing with sales tax collection on vehicle purchases to be put before the Missouri legislature in 2013.

Deputy Director Richard Sheets of the Missouri Municipal League says its attorneys helped craft 1329, which would have allowed local governments to resume collection of sales taxes on vehicles purchased from private Missourians or out-of-state dealers. The bill was created after a Supreme Court ruling in March that such collection was unconstitutional.

It had strong bipartisan support and was passed by veto-proof margins in the session, but was vetoed by Governor Jay Nixon. The House didn’t bring the bill up to attempt a veto overturn, with Republican leadership saying it didn’t have enough support from the Democratic caucus.

Governor Nixon in recent weeks highlighted that overturning his veto would mean more than 122 thousand Missourians would retroactively owe taxes on vehicle purchases made since the Court’s ruling. That alarmed many lawmakers who had supported the bill before, and was seen as likely grounds for a court challenge over the bill’s constitutionality.

Sheets says the issue of retroactively was considered by MML’s attorneys when they were creating the language. “Their thought was to make this seamless in order to show that this was … had always been the intent of the legislature. That really was our point in this. This was not a new tax, this was not a new feature of our sales tax … that was the intent of the statute when it was written.”

Sheets anticipates another bill to be offered in the 2013 legislative session, taking into account the concerns over retroactively.

He says without those tax collections, local governments are suffering from the loss of a revenue stream they have enjoyed for decades. Enactment of use taxes at the local level can address that concern, but Sheets thinks the issue must still be addressed legislatively.

“Our problem is this was a tax that should never have gone away … this was included in the sales tax when the voters voted on this. We just think that there’s a lot of problems with this whole thing.”

Republicans have criticized Governor Nixon for not becoming involved in the development of the bill prior to vetoing it, but Sheets says the League met with the Governor on several occasions while it was being developed.

“The Governor really understood the issue and wanted to work with us and we met with the Governor, but he just could not get past thinking that another vote was necessary and we really disagreed with the Governor in that respect.

Sheets expects to work with Nixon again in creating a new bill.

House Democrat leader offers veto session predictions

September 12, 2012 By Mike Lear

House Republicans could attempt overrides of several vetoes by Governor Jay Nixon, but two issues are expected to be at the forefront of today’s veto session.

House Minority Floor Leader Mike Talboy (D-Kansas City)

Republicans will have to start in the Senate to attempt an overturn of Senate Bill 749, to allow employers and individuals to opt out of insurance coverage for contraception, abortion and sterilization. House Minority Floor Leader Mike Talboy (D-Kansas City) says that veto will be tough to sustain.

“I think that if you look at the vote total, and if you look at the makeup of certain districts that some of our folks represent, I think that one is going to be the much tougher of the two to do.”

Talboy says Republicans will have a much harder time finding the votes to overturn the veto of HB 1329, to allow sales tax collections on vehicle purchases made out of state or from private Missourians.

“I know that there are some Democrats that, for their area, feel that it is vitally important. However unless you get to a 95, 96, 97-type area with the Republican votes, I don’t know that there are enough Democratic votes to even come close to anything there.”

A two-thirds majority, 109 votes, is necessary to overturn a veto in the House. When the bill passed in May it received 122 “yes” votes. 44 of those were from Democrats, but 16 Republicans voted against it.

Some lawmakers say enough Democrats might switch their vote to side with the Governor to fall short of the veto override. Or, they say Governor Nixon might have swayed enough lawmakers by saying more than 122 thousand Missourians will retroactively owe taxes on vehicle purchases made since March if the veto is overturned.

Talboy says the Governor’s office has been contacting members of his caucus. “As far as how many of them have had in-depth discussions, no I don’t know how many of those folks were there, but I know they’ve called me asking where I am and then kind of giving me the pitch on why they feel that it is important to veto and important to sustain the veto.”

The Kansas City Star reports one House Democrat was recently targeted in a mailer paid for by a nonprofit organization funded by the Democratic Governors Association, America Works USA, for supporting the bill in May. Representative Genise Montecillo (D-St. Louis) and 19 Republicans were the subjects of mailers.

Talboy says that hasn’t been popular among House Democrats. “That has caused some consternation in our caucus … but as far as whether or not it’s going to make any difference moving forward on this bill, I don’t think anybody that got the mailer changed their mind based upon it.”

Nixon again urges against veto override of bill allowing tax on out-of-state vehicle purchases (VIDEO/AUDIO)

September 5, 2012 By Mike Lear

With the veto session a week away, Governor Jay Nixon continues to make his case that the legislature should not overturn his veto of HB 1329, a bill to allow the collection of sales taxes on vehicle purchases made out-of-state.

Click the image to view a video of Nixon’s media conference.

Nixon says of the more than 122 thousand Missourians that will face a retroactive tax bill if his veto is overturned, about 14,000 bought a vehicle from an out-of-state dealer. More than 108,000 were private transactions.

He says the issue is less about out-of-state vehicle purchases than it has been portrayed to be. “I felt like in the public there was this sense that those were all dealer or out-of-state, and when you see 89 percent this way, I wanted to get these facts out.”

The House sponsor of HB 1329, Representative Ryan Silvey (R-Kansas City), says 14,000 is still a large number of purchases. “If you’re okay with incentivizing 14,000 people to cross state lines to make the second largest purchase next to their house, then I guess it’s not a big deal, but as far as the legislature’s concerned it’s a big deal.”

Nixon says the passage of a use tax should be left to local jurisdictions to decide. “This is something that has been passed since the end of the legislative session in at least two jurisdictions … running around the voters for any tax, much less a retroactive one … to run around the voters, to say that you can go back and collect a tax for something that the court said was not taxable seems to be not good public policy, not good fiscal policy and as I said before, I just don’t think it’s right.”

Silvey says the issue is one of parity at the state level, and needs to be addressed at the state level. “Because of the way the court decision yanked these taxes out, the way that they were being collected, to have all 522 municipalities, all 114 counties try to address it piecemeal, then you end up with small inequities everywhere around the state. It makes much more sense just to take care of it the way we’ve chosen to take care of it, which is just to put it right back to the status quo. Nothing changes after this bill from before the (Supreme) Court decision. It’s the way it’s been for the last sixty years.”

Representative Ryan Silvey (R-Kansas City)

Silvey says if the legislature does override Nixon’s veto and the Department of Revenue holds off on issuing tax due notices, lawmakers could then strip the retroactive component from the law in the next legislative session. “I’ve spoken with members of the Senate. Senator Kehoe is willing to file the legislation if I’m not there to file it myself next year.” Silvey is seeking election to the Senate in November.

Silvey says that would be preferable to letting the veto stand, while more out-of-state vehicle purchases are made.

Nixon says overriding the veto on HB 1329 could just set up another lawsuit similar to the one the Supreme Court ruled on in March. “Nothing in this bill would fundamentally change the underlying legal theory of this: that people need to vote if you’re going to have a raise in taxes.”

Silvey accuses the governor of playing politics with the issue. “If the governor really had substantive policy issues with this, he should have helped us address it during session. He should have worked with us to find a solution instead of waiting for us to go home, issuing a veto and then deciding to hold press conferences 60 days before a General Election.”

The veto session is a week from today.

AUDIO: Hear Mike Lear’s interview with Ryan Silvey, 5:48