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Prop D would exempt Olympians' medals from tax

Prop D would exempt Olympians' medals from tax

Special Olympians have never been taxed, official says

October 28th, 2018 by Bob Watson in Local News

If voters Nov. 6 say "yes" to Proposition D, the proposed 10 cents-per-gallon increase in Missouri's tax on gasoline and diesel fuels, they also will be approving a new law exempting the winners of Olympics, Special Olympics or Paralympics from paying state income taxes on their medals.

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Mark Musso, president and CEO of Special Olympics Missouri, told the News Tribune in a recent letter that passing the law won't change anything for Special Olympics participants because they don't receive any "cash prizes at any level of competition (and) are not currently taxed for winning any awards."

Based on news stories and letters to the editor he's seen around the state, Musso said: "It appears there has been some confusion on how (the proposed law) relates to Special Olympics athletes and the medals they win at their competitions."

He added: "Our athletes train for weeks and months at a time, honing their skills as much as possible before competition. They then have the opportunity to compete against others and earn a bronze, silver or gold medal. These awards mean a lot to our athletes and are proof to themselves, and the rest of the world, that they can train and compete just like any other world-class athlete."

Musso said his comments are intended only to explain the current situation for Special Olympics athletes — not to comment on Proposition D.

"Special Olympics Missouri is a non-political organization, as a 501(c)(3) charity," he explained. "We are not commenting on what way people should vote on Prop D."

Scott Charton, spokesman for SaferMO.com, the group promoting passage of Proposition D, told the News Tribune on Friday that the Olympics medals language has been discussed as he travels around the state, "and very positively so — average Missourians cannot believe the state would subject Olympic heroes to state income taxes for their Olympic prizes because of the honor they would bring to our state."

Charton added: "If I meet an Olympian from Missouri, I want to shake her or his hand — not have the state of Missouri reach into her or his pocket to grab a few bucks."

Olympics medals and fuels taxes got together in the same bill during the legislative process last spring — because the proposed fuels tax increase was added to a bill that began only as a tax exemption for Olympic medal winners.

Charton said Friday that outgoing House Speaker Todd Richardson, R-Poplar Bluff, conceived the original bill after hearing a discussion during an Olympics television broadcast about the taxable nature of Olympics medals and cash prizes.

Charton told the News Tribune he doesn't know of any Missouri Olympian who has paid such taxes, but said Richardson told him "that wasn't an appropriate thing to tax."

The state Department of Revenue didn't answer a question from the News Tribune about whether current state law imposes a tax on Missourians winning Olympic medals.

At Richardson's request, state Rep. Jean Evans, R-Manchester, added two new sentences to existing law in a bill she prefiled last December: "Gross income shall not include the value of any prize or award won by a taxpayer in athletic competition in the Olympic Games." This subsection shall be known and may be cited as the "Olympic Dream Freedom Act."

The rest of the five-page measure made several, minor changes in the state law's references to the federal Internal Revenue Service Code, as it affects Missourians' adjustments to the calculation of their state adjusted gross income.

Evans said Saturday: "I care deeply about the importance of athletes as role models for our young people because of my many years as both an athlete and a coach. When Speaker Richardson and I learned the obscure fact that the cash value of the precious metals in the medals, along with cash prizes, won by Olympic athletes are subject to state income tax, we were startled.

"That's just not right. So we set about to provide a tax exemption, at a very low cost to the state, but as a token thank you to Missourians who excel and inspire us."

When the House debated Evans' bill last Feb. 13, representatives approved state Rep. Kevin Corlew's amendment adding Special Olympic and Paralympic medals to the proposed tax exemptions.

Corlew told the News Tribune his amendment "was about showing honor to athletes in Special Olympics and Paralympics, in the same way that we were showing honor to the athletes in the Olympic games. Regardless of the variety of tax treatment in the past, we wanted to make sure that in the future, none of the athletes from these three games would be taxed on their achievements."

Evans said she had no problem with Corlew's amendment.

"It is my sincere view that Special Olympics athletes are deserving of the same consideration as Olympic athletes for their heroic efforts in overcoming special challenges and inspiring all of us," she explained. "So, if benefactors ever do consider cash prizes for Special Olympics athletes, those Special Olympics athletes would receive the same consideration under law as international Olympians."

The House on Feb. 15 sent the amended bill — still only affecting a tax exemption for medal winners — to the Senate, on a 109-39 vote.

After holding its hearing on the measure on March 6, the Senate's Ways and Means Committee voted March 27 to recommend the full Senate pass the bill.

But it didn't come up for Senate debate until May 17 — the next-to-last day of the 2018 General Assembly session.

In bringing the bill up for debate, Senate sponsor Caleb Rowden, R-Columbia, explained: "A little known fact about Olympic medals is that, in some cases, participants are charged for them."

Rowden named J'den Cox, a University of Missouri wrestler who won a bronze medal at the 2016 Olympic Games in Rio de Janeiro, but offered no details of Cox's tax liability.

In explaining the bill last May, Rowden added: "We thought this was a good way to provide them a little bit of relief and make sure they weren't punished for being a world-class athlete."

Rowden didn't respond to a request for a comment for this story.

During that May 17 debate, Sen. Dave Schatz, R-Sullivan, offered a substitute bill that added the fuels tax increase proposal, the statewide referendum for voters to approve the fuels tax increase, and the "Emergency Freight Bottleneck Fund" language to the original House Bill on Olympic medals.

As he introduced that substitute, Schatz explained: "The Senate substitute is my best effort to help solve the transportation funding issue that we all know exists. We've been working on transportation funding for years (and) there has been a renewed urgency on this issue, this last year."

Senators passed the bill by a 24-8 margin, sending it back to the House because of the changes.

On the last day of the legislative session, the House voted 88-60 to pass the bill, sending Proposition D to the statewide vote next month.

Evans said Saturday: "I was glad to be able to work with the legislative leadership when they came to me and asked to add the motor fuels user tax increase to House Bill 1460.

"I believe the conservative view is that user taxes are reasonable because they are paid by those who are using services."

Now, if voters say yes, the proposed law would:

  • Raise the state's fuels tax by 10 cents a gallon, phased in over a four-year period.
  • Create the "Emergency State Freight Bottleneck Fund" to pay for certain repairs to congested traffic areas. The law does not use any of the fuels tax increase to pay for that fund but instead says lawmakers would have to designate specific money for that fund.
  • Exempt the Olympics, Special Olympics and Paralympics medals from state taxation.