Legislation passed Wednesday by the Missouri House of Representatives would effectively reverse a state Supreme Court ruling that bill proponents say is costing businesses millions in additional sales taxes.
Senate Bill 928, passed by the Missouri House, “would reverse that damage and keep Missouri businesses competitive with those in other states,” according to the Missouri Chamber of Commerce and Industry.
The legislation, sponsored by Missouri Sen. Brad Lager, R-Savannah, next goes to Gov. Jay Nixon for signature.
Last fall, the Missouri Supreme Court issued a ruling in ICC Management Inc. v. Director of Revenue, holding that a sale to local governments was not a “sale at retail” because it was not subject to sales tax. So ICC could not claim the sale for resale exclusion and must pay tax on its purchases.
The ruling meant businesses would have to pay taxes on products sold to tax-exempt entities. The Missouri Department of Revenue issued a statement earlier this year that the court’s decision affected the use of the resale exclusion for all transactions effective Sept. 1, 2009, when the court decision was final.
“The Supreme Court decision has broad-reaching consequences for all companies that do business with local governments, state governments, churches, schools and non-profit organizations, to name a few,” Tracy King, director of taxation for the Missouri Chamber, said in a statement. “It is an extra burden on every sale to these entities, and I am confident that was never the intent of the Missouri Legislature when passing the original exemptions.”
The ruling ultimately would cost the tax-exempt entities, according to King, as well as put Missouri businesses at a competitive disadvantage. “Companies that bid to provide products and services to government and other tax exempt entities will have to pay Missouri sales tax, while out of state companies will not,” she said in a statement. “That puts Missouri employers at a clear disadvantage and would incent moving that business outside the state.”
State Rep. Mike Sutherland, R-Warrenton, handled SB 928 in the House and sponsored similar legislation in the House, HB 2048.
The Missouri Chamber of Commerce and Industry is the largest business organization in Missouri.
Similar Posts:
- Minnesota Supreme Court rules Pawlenty’s unallotments exceeded his authority
- More Solutions for High Credit Card Rates
- Missouri seeks to lend small businesses $800,000
- Chamber: ‘Not too late’ to do financial reform right
- Small business networking opportunities in the area for May and June 2010
Tags: Bill, Policy Bill