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Editorial: Goofball legislation

Friday, April 30, 2004

A decision on Wednesday to end a legislative tax threat against Missouri's two largest newspapers in Kansas City and St. Louis does little to remove the stain of hatchet lawmaking at its worst.

Claiming a proposal to end the sales-tax exemption on material and equipment used to produce newspapers in Kansas City and St. Louis was merely an attempt to "close a loophole" and generate more state revenue, state Rep. Richard Byrd of Kirkwood, Mo., had added an amendment to a House economic development bill just days after the St. Louis Post-Dispatch published a full-page editorial critical of House Republicans who had voted to cut medical benefits for the poor. The editorial featured photographs of those legislators. The Kansas City Star reran the editorial. Byrd was not one of the legislators targeted in the editorial.

Byrd's amendment narrowly limited the removal of the sales-tax exemption to the Star and Post-Dispatch, but newspapers across the state cried foul. Despite Byrd's denials, the amendment appeared to be a legislative vendetta against the two papers that ran the critical editorial. In any event, the amendment singled out just one segment of Missouri manufacturing that is protected from sales taxes. By the way, sales taxes are collected on the retail sales of all newspapers in Missouri.

A bit of background:

For many years newspapers considered their purchases of ink, newsprint, computers and various other production items to be exempt from sales tax under the same statutory exemptions given to other Missouri manufacturers. Officials didn't question that until the 1980s when state tax auditors discovered what they considered to be a revenue gold mine.

These auditors embarked on a systematic statewide review of newspapers and began assessing huge back payments and penalties for sales taxes. In many cases -- usually at smaller newspapers -- the payments were made because they were less expensive than a drawn-out legal challenge.

When the Southeast Missourian was audited in 1993, the newspaper refused to accept the finding that it owed additional sales tax or penalties. An appeal of the audit led to a hearing in 1994 by the state's Administrative Hearing Commission, which supported newspaper's position. The case then moved to the Missouri Supreme Court, which decided in February 1996 that newspapers were covered by the same state statute that granted sales-tax relief to other manufacturing companies. Subsequently, the legislature updated a sales-tax exemption statute to include items used in the production of newspapers along with the paper on which they are printed.

Not only did Rep. Byrd's effort to remove those exemptions for the Star and Post-Dispatch smack of retribution against an editorial, it also would have put the exemption statute in conflict with the more general exemption for manufacturers and with the Supreme Court's 1996 decision.

More than that, Byrd's amendment -- and the hearty endorsement given by most House Republicans -- flies in the face of Republican pledges to balance the state budget without relying on tax increases. The House has tangled repeatedly with Gov. Bob Holden over his request for increasing taxes and closing loopholes to generate more revenue.

Every legislative session has its share of goofball bills and floor debates. But this year's session, particularly in the House, has been marred by one off-the-wall antic after another.

Missouri needs grownups in Jefferson City. We've had enough of the childishness.


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