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Senate Ways and Means Committee gets right to business

The Missouri legislative session is still in its early days, but the Senate Ways and Means Committee under the chairmanship of Sen. Will Kraus (R-Lee’s Summit) is showing it means business by passing several pieces of legislation this week.

By unanimous votes, including the committee’s two Democratic Senators, Sen.Scott Sifton (D-Affton) and Sen. Paul LeVota (D-Independence), the Ways and Means Committee passed Senate Bills 18, 19, 20 and 15, legislation dealing with how the Missouri Department of Revenue conducts its business and makes its determinations. All the bills, with the exception of SB15, were passed by the legislature last year, but vetoed by Governor Nixon.

  1. Senate Bill 18 requires the Department of Revenue to notify sellers if there is a change in sales tax law interpretation. Notification may be by mail, e-mail, or secure electronic means of direct communication. The Department may also update its website with information regarding modifications in sales tax law, but it still must mail or email affected taxpayers notices of changes.

  2. Senate Bill 19 clarifies a new method of allocating corporate income between states for tax purposes made available two sessions ago is available for all regular taxpayers.

  3. Senate Bill 20 creates a sales and use tax exemption for materials and utilities used by commercial laundries, and includes a definition of “commercial laundry.”

  4. Senate Bill 15 creates the Study Commission on State Tax Policy. The commission will be composed of the members of the Joint Committee on Tax Policy as well as members of the public who have expertise in the field of taxation. The commission is tasked with examining Missouri’s tax system to identify its strengths and weaknesses and to provide any recommendations for improvement. The commission shall cease activities by January 1, 2018. Many other pro-taxpayer provisions are also contained in the bill, including establishment of an Office of Taxpayer Advocate.

The bills are now on their way to the Senate floor for debate.

The Ways and Means Committee also heard several bills for the first time this session, all of which were supported by Associated Industries of Missouri.

Senate Bills 149 and 57 contain language on tax exemptions for new and expanding data centers. The language is different than language drafted by AIM that was in bills vetoed by Governor Nixon last year.

“While we support these pieces of legislation for new and expanding data centers, we believe the current law already exempts all data processing from sales and use tax in the same manner as manufacturers and will seek to clarify this for the Department of Revenue in this or separate legislation,” AIM president Ray McCarty told the committee while testifying in favor of the bills. “Such exemption does not contain conditions and requirements that exist in this bill and has been affirmed by several Missouri Supreme Court cases.”

In addition, the committee heard Senate Bill 115 that allows taxpayers to seek a refund after the statute of limitations has passed if their return is reexamined by the Department of Revenue.

“Taxpayers should always be able to get their money back when they have overpaid their taxes,” said McCarty while testifying in favor of SB115. “We will suggest language to the sponsor that was vetoed last session by Governor Nixon that will ensure taxpayers will be able to achieve such refunds…refunds that are now being delayed and denied by the Missouri Department of Revenue under a strained interpretation of the existing statute.”

The bills receiving the hearings are likely to be brought up for votes during the committee’s hearing next Thursday afternoon.

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