The Missouri Senate unanimously approved a bill Thursday that would require the state to notify businesses of any changes made to its sales tax policies.
The legislation aims to inform businesses if the courts or Revenue Department alter policies that could impact services and products subject to sales taxes.
Businesses would be exempt from paying back taxes if the department fails to give notice of those changes, which bill sponsor Sen. Will Kraus said would protect them if they were unaware their products suddenly were subject to sales taxes.
"We're trying to make sure the businesses aren't notified through the audit process," the Lee's Summit Republican said. "It's just not fair."
Democratic Gov. Jay Nixon vetoed similar legislation last year because of concerns that it would cut annual revenue by about $100 million.
Republican lawmakers have disputed those estimates, and a fiscal note on this year's legislation estimates the measure would cost the state less than $425,394 next fiscal year. Kraus said even the recent estimates could be high and the actual losses will vary depending on how often tax policies change.
Kraus said other changes to the legislation that were recommended by the governor's office and Revenue Department also could increase its chances of becoming law. Nixon's spokesman, Scott Holste, declined to say whether the governor supports the measure, explaining his office doesn't typically comment on pending legislation.
The bill this year does not require notification if a reasonable person would have expected changes in sales tax based on prior laws or regulations. The legislation also allows the Revenue Department to inform businesses via mail, email or a secure electronic communication.
"Hopefully that will alleviate some of the concerns," Kraus said.