Missouri Senate gives initial approval to Kinder's tax holiday

Tuesday, March 11, 2003

JEFFERSON CITY, Mo. -- State and local sales taxes would be lifted on clothing, school supplies and computers for one August weekend under a bill given initial Senate approval Monday.

Both Republican Senate President Pro Tem Peter Kinder and Democratic Gov. Bob Holden support the "sales tax holiday," which would exempt certain items from the 4.225 percent state sales tax and from any local sales tax unless the local government opted out.

The exemptions would apply to articles of clothing costing no more than $100 each; school supplies costing no more than $50 per purchase; and personal computers costing no more than $2,000.

Accessories such as watches and jewelry would still be taxed, as would radios, headphones and sports equipment.

If enacted, the holiday would run Aug. 8-10 this year and during the second weekend of August 2004. The bargain shopping would expire before the 2005-2006 school year.

Kinder, of Cape Girardeau, sponsored the bill, which he and Holden hope would encourage people to spend money and help Missouri's economy. The governor's office has estimated that dropping the sales tax would cost the state about $5 million a year.

Local governments could opt out of the sales tax holiday by approving a local ordinance. The bill would create a state legislative committee to study the impact of the sales tax holiday.

"I see nothing but positive comments on it," said Kinder, R-Cape Girardeau. "It's hugely popular with the public."

Kinder, who has backed similar measures in the past, said several states have successfully used the sales tax holiday concept, including Texas, Florida, New York, Georgia and South Carolina.

Senate Minority Floor Leader Ken Jacob said he supported the idea but said additional money would have to be found to replace the lost revenue, given the state's current budget problems.

The Senate adopted an amendment sponsored by Jacob, D-Columbia, to tax residents from other states for their Missouri gambling winnings. Jacob said his amendment would raise $7 million -- more than enough to make up for the estimated losses caused by the sales tax holiday.

Jacob also proposed to lock in the state's income tax to the federal government's 2003 definition.

Jacob had hoped by adding the measure that the bill would become a starting point for reducing the state's budget shortfall. The amendment failed 18-15.

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