Missouri House passes bill rectifying sales tax uncertainty

Sen. Mike Bernskoetter, R-Jefferson City, leans over to talk to Sen. Brian Williams, D-St. Louis, on Wednesday during a veto session at the Capitol.
Sen. Mike Bernskoetter, R-Jefferson City, leans over to talk to Sen. Brian Williams, D-St. Louis, on Wednesday during a veto session at the Capitol.

Divided mostly along party lines, Missouri lawmakers on Wednesday debated more than a dozen amendments offered for House Bill 1 in the special session Gov. Mike Parson called for this summer.

Despite some Democrats' efforts to limit who is to benefit from the bill, it passed the House without any changes.

HB1 was the only new bill representatives considered during Wednesday's special session of the Legislature.

During a simultaneous veto session, they also considered overturning one House bill the governor vetoed after its passage this spring.

Representatives voted not to overturn Parson's veto of House Bill 399, a small health care omnibus bill. House Bill 447, modifying provisions relating to coroners, was withdrawn from consideration.

Parson called for the special session in August, responding to the state Supreme Court's decision on a legal fight over taxes paid by a St. Louis County resident. David Kehlenbrink sold two vehicles - a Ford truck and a Kawasaki motorcycle - and later bought a new Dodge pickup. He received sales tax credit on the two previously sold vehicles. Later, Kehlenbrink sold two more vehicles but was told he could not take tax credit on them (against the sales taxes he paid on the Dodge).

Kehlenbrink's case reached the Supreme Court, which said he could take the sales tax credit on only one vehicle.

Lawmakers on Wednesday criticized the Missouri Department of Revenue for flip-flopping on how many vehicles' sales taxes could be applied against the purchase of a single vehicle.

State Rep. Ingrid Burnett, D-Kansas City, said she supported a proposed amendment to the bill that would have limited the size of companies that use the benefit. The amendment would have prevented companies with 12 or more employees from applying the sales taxes for more than one vehicle sold to the sales taxes they owe on new purchases.

"I keep hearing the term - in one form or another - 'business as usual.' The problem that I have with that is that the business as usual that we've been doing has been established by the Supreme Court to be against the law," Burnett said. "Rather than take to task the DOR, who has been breaking the law, we have decided to call a special session to come here to change the law."

If lawmakers are going to change the bill, they should change it to help the residents of Missouri, she said.

The bill's sponsor, state Rep. Becky Ruth, D-Festus, replied the bill should not be limited.

"Hard-working Missourians have built their companies," Ruth said. "They may have 15 employees. We need to keep our intent - what the bill is designed for that we're dealing with today."

The issue of whether Missourians should be allowed to apply sales taxes paid on multiple cars to the purchase of another has been under consideration for years, Rep. Peter Merideth, D-St. Louis, said.

Since 2008, 17 administrative hearings have considered whether it is appropriate to use the sales of multiple cars to offset the car they buy. And 16 times, they found they couldn't. The 17th time, in the Kehlenbrink case, the administrative hearing commission determined multiple vehicles could be used.

It is curious that the change in the ruling happens when the state has a Republican governor and Republican General Assembly, Democrats said. The issue was never considered an emergency before, Merideth said.

Maybe the reason it wasn't considered an emergency was that big businesses in Missouri continued to be allowed to apply sales taxes they paid for old vehicles or equipment toward the sales taxes of new vehicles, Merideth said.

"It hadn't been explicitly ruled on by the Supreme Court, so they said, 'Well, we're just going to keep doing it anyway.' As long as they could get away with it, it's not an emergency for us," he said.

The Supreme Court's decision supported the views of the state Department of Revenue that only one vehicle's sales tax may be applied to the purchase of a new vehicle.

"This has not been a question," Merideth said. "But apparently now we have some of the larger businesses that seem to be saying to the governor, 'We wish you hadn't established this by the Supreme Court ruling because now we can't keep doing this."

Maybe a way to make sure the bill was not about protecting big business' interests was to limit who could benefit from the sales tax application, he said.

The House later passed the bill, sending it to the Senate for consideration. The Senate will hear the bill today before its Ways and Means Committee.

Merideth said he didn't think the sales tax was what the body should be discussing Wednesday.

State law allows the governor to convene the General Assembly in special session for a maximum of 60 calendar days at any given time. When a governor does so, only subjects recommended by the officeholder when calling for the session - or a special message - may be considered. The governor may choose to add other subjects to the session.

Democrats - Merideth among them - have called on Parson to do just that and address firearms violence or scrutinize the drop in Missouri's Medicaid rolls. Parson has not done so.

The Senate remained silent during Wednesday's veto session on a chance to override vetoes of four bills by Parson, but two senators spoke out in the chamber on the tragedies of gun violence in the state.

The Senate made no motion to override Parson's vetoes of Senate bills 147, 202, 282 or 414.

In the case of SB147, the standing of Parson's veto means Missouri law regarding motorcycle helmets will not change.

The other Senate bills had to do with mining royalties on federal land, allowing open-air human cremations and innovations in health insurance.

After the chamber's silence on veto overrides, state Sen. Jamilah Nasheed, D-St. Louis, spoke to her colleagues about gun violence in the state.

"Make no mistake about it: The gun violence epidemic in the state of Missouri, especially in the city of St. Louis, is a public health crisis," Nasheed said.

She cited at least a dozen children have died in gun violence in St. Louis since April, adding "rural Missouri is not immune from the epidemic either," especially when taking into account suicides by firearm.

"This epidemic has socio-economic causes and impacts that must be taken into account. It must be addressed through positive change when it comes to public policy, changes I know we can work on together here in the state Senate," she said.

Nasheed and state Sen. Shalonn "Kiki" Curls, D-Kansas City, said they do not want to infringe upon Second Amendment rights of law-abiding gun owners, though Curls added the state's firearm-carry laws may have had unintended consequences that have led to an increase in gun violence.

State Sen. Mike Bernskoetter, R-Jefferson City, said after Wednesday's veto session that his constituents and rural Missourians are worried about the protection of their Second Amendment rights, but addressing gun violence is "worthy of a conversation" that he's fine with having, given his colleagues' stated intention not to infringe upon gun rights.

Bernskoetter said there could be some hearings on gun violence in next year's legislative session - and if no legislation is filed on the issue, then it could be heard before a special committee.

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