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Internet tax bill and bills to control growth of property tax assessments get early hearing in House

The House Ways and Means Committee, chaired by Rep. Chrissy Sommer, met today to consider several bills relating to property tax assessment limits and a fix to allow Missouri to collect use taxes from remote sellers. The hearing was the first meeting of the Committee in the first full week of the 2020 Legislative Session.


HB 1957, sponsored by Rep. J. Eggleston, was the first bill heard by the Committee. The bill would adjust Missouri law to allow for collection of use taxes from remote sellers, provided certain thresholds are met, and would use the proceeds to lower the individual income tax. The bill contains several problematic provisions for vendors and local governments and for that reason, Associated Industries of Missouri testified in qualified support of the bill.


Some problems in the bill include requiring a second local use tax vote that would apply local use tax only to internet sales, redirection of the 1% School District Trust Fund sales tax that was adopted by voters in Proposition C to General Revenue, and there is no mention of certified service providers - entities that help remote sellers correct the proper amount of tax on the correct transactions. Instead, the bill contemplates the Missouri Department of Revenue would perform the function instead of the certified service providers.


Chuck Pierce testified on behalf of Associated Industries of Missouri, noting these issues. He told the Committee certified service providers, and other sellers with systems approved by states, provide the correct amount of tax in real time as a customer completes an online purchase while the bill only requires the Missouri Department of Revenue to maintain a database.


Rep. Eggleston was asked whether his bill represented Governor Parson's plan and he responded it came from hearings he held over the interim and was not the Governor's plan.


The bill was supported (in a qualified manner for similar reasons as noted by AIM) by the Missouri Retailers and Missouri Grocers Assn. and another statewide business organization. Many local government and school associations and advocates testified against the bill, including the Missouri Municipal League, the Municipal League of Metro St. Louis, and the Missouri Association of Counties.


No action was taken on the bill in the hearing today.


Also heard were several bills that would limit increases in property tax assessments in response to dramatically increased assessments in some areas of the state. Limiting one taxpayer's property tax assessment increase could impact other taxpayers by creating unequal taxes on similarly valued property, as well as several other issues.

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