AIM wins many tax battles
While the broad-based tax cuts in SB 509 and the battle to override the governor’s veto drew the most attention during the session, there were a myriad of smaller bills that will do many things to help the business climate in the state of Missouri.
The watershed bill for tax issues was Senate Bill 584. In an exercise not unlike herding cats, State Reps. Eric Burlison (R-Springfield) and Andrew Koenig (R-St. Louis), and Senate sponsor Sen. Bob Dixon (R-Springfield), somehow listened to many voices and came up with one piece of legislation with many brilliant ideas.
Clean-up language to ensure the Department of Revenue charges sales tax on admissions to entrainment, not businesses that offer athletic training, or dance lessons, or other services;
Apportionment language that allows service industries an additional choice of formulas used to determine Missouri income for tax purposes;
The Associated Industries version of concise data center sales tax exemption language;
Language that shifts the burden of proof in nearly all tax dispute cases to the Department of Revenue;
Boat motor fuel tax exemption on fuel purchased from a marina;
A sales tax exemption on the sale of used manufactured homes;
Sales tax exemptions on cancer treatment drugs and devices;
Clarification that utilities, machinery and equipment used to transmit and distribute electricity are exempt from sales and use taxes;
Language that allows retailers to advertise that a price includes sales taxes; and,
Language that helps ensure the Department of Revenue gives tax refunds to deserving taxpayers.
This impressive list of legislation was assembled as a House Committee Substitute by Rep. Koenig and held together during a conference between Senators and Representatives Thursday evening.
Most of the language in the bill comes from AIM priorities and legislation, some of which has been around for many sessions. For instance, concise language on the tax exemption for the infrastructure for data centers. AIM president Ray McCarty says he started trying to pass nearly the same language seven years ago, but this is the first time it has been included in a truly agreed and finally passed bill.
Another topic that stirred controversy and spurred legislation during the session was the Department of Revenue’s auditing of businesses that provided DOR’s definition of entertainment. With DOR demanding back sales taxes from businesses that provide services such as dance lessons and workouts, the legislature stepped in with a definition that sales taxes may only be collected on admission to entertainment performances.
Shifting the burden of proof in tax dispute cases was also a priority issue among legislators during the session. Under current law, when the Department of Revenue alleges a taxpayers owes more tax than has been paid, it is up to taxpayers to prove themselves innocent. Wording in bills such as SB 584, SB 829, and HB 1455 shifts the burden of proof to the Department of Revenue.
Senate Bill 860 also turned into a great bill for tax legislation. It includes a sales tax exemption for manufactured homes, AIM refund language that makes it easier for taxpayers due a refund to get that refund, including graphing calculators in the back-to-school sales tax holiday items, sales tax absorption into the price of an item, and withholding filing frequency language that allows small businesses to file fewer quarterly withholding tax returns.
Other bills included these and other important issues:
Apportionment: SB 693, SB 662, SB 612, HB 1296, HB 1865
Notification of sales tax law changes: SB 612, SB 662
Tax exemption on used manufactured homes: SB 584, SB 693
Sales tax included in price: HB 1296, SB 662
Other important bills on taxation passing the legislature this year include:
SB 612 (Schaaf) – Includes the non-resident entertainer and athlete tax withholding extension.
SB 727 (Chapelle-Nadal) – Sales tax exemptions for farmers’ markets.
HB 1865 (Redmon) – Provides an exemption for utilities used to provide food service.