(April 5, 2007) The Missouri House today approved HB 131, sponsored by Rep. Shannon Cooper, exempting all utilities and other business inputs from sales tax. The bill also contains several other important tax changes (see additional information below). The Taxpayers Research Institute of Missouri thanks Rep. Cooper for his leadership in passing this legislation. "This legislation is the most important tax legislation to manufacturers in nearly a decade," said Ray McCarty, Executive Director of the Institute. "Manufacturers considering locating or staying in Missouri would have an incentive to stay in Missouri as a result of this legislation." Gary Marble, President of Associated Industries of Missouri echoed McCarty's comments. "The certainty provided to manufacturers by the passage of this bill will allow us to better compete with other states to retain existing manufacturing operations and to attract new ones to Missouri," said Marble. The bill was reported to the Senate.
Also today, Rep. Bryan Stevenson, chairman of the House Tax Reform Committee, led his committee in approving a committee substitute for SB 30 that also contains the same exemption language found in HB 131. The Senate bill will now be referred to the full House for further debate and consideration. This represents the bill that is furthest in the legislative process on this issue and we thank Rep. Stevenson and the House Tax Reform Committee for their efforts on behalf of Missouri manufacturers.Although the exemption contained in these bills provide certainty, the cost to state and local governments is not large because nearly all business inputs are already exempted under other provisions of the sales tax law. The problem for taxpayers is that fine lines of distinction may be drawn by aggressive tax auditors, reducing the economic development benefits of these exemptions. "When we are not sure how the taxing authority will rule on certain items, it is difficult to promise the exemption to manufacturers that are looking at Missouri for a plant expansion or location," McCarty said. "This bill will eliminate confusion and allow us to aggressively pursue the attraction and retention of manufacturing operations in Missouri."
The Taxpayers Research Institute of Missouri and Associated Industries of Missouri will continue to aggressively pursue this manufacturing exemption throughout the 2007 Legislative Session.
