General Assembly Passes AIM/TRIM Supported MoDOT Supplier Sales Tax Exemption

May 22, 2007 - You may recall in an earlier post, we highlighted HB 248, sponsored by Rep. Neal St. Onge (R-88, Ellisville) that would allow contractors doing business with MoDOT to use project exemption certificates and eliminate sales tax on purchases made in fulfilling the contracts. Similar legislation was also filed by Rep. Sally Faith and Senator Chuck Gross.

We are pleased to announce that this exemption was included in SB 22 that was Truly Agreed and Finally Passed on the final day of session.

At the hearing, the Institute's Ray McCarty testified that the current situation places Missouri suppliers at a competitive disadvantage with suppliers in other states and actually encourages even Missouri contractors to use out-of-state suppliers for highway projects with our own state highway department. Requiring the payment of sales tax on such purchases also results in a diversion of money from the Highway Fund to General Revenue as the highway projects are paid for with highway funds. Joe DeLong, DeLong's Inc., a steel fabricator of highway bridges, testified that the current law causes the already tight profit margin to completely disappear for a Missouri contractor while it encourages MoDOT to use steel fabricated outside Missouri. He testified the 1-2% difference between Missouri sales and use tax rates can make the difference between winning and losing such contracts.

SB 22 now awaits approval from Governor Blunt. If signed, the bill would become effective August 28, 2007.