Ex-legislator seeks to clarify intent of tax-exemption law

A former Missouri legislator is reaching out to current lawmakers as he attempts to clarify the intent of a law he helped write more than 15 years ago.

Patrick Naeger of Perryville served in the Missouri House of Representatives from 1995 to 2002 and now is the executive vice president for Healthcare Healthmart Pharmacy and Healthcare Equipment and Supply Co.

During his time in the House, Naeger, a Republican, focused on a number of health and medical-related issues. One bill he sponsored changed state statutes regarding sales tax exemptions to include home medical supplies. The law exempts the sale and rental of several medically necessary devices, including medical oxygen, Braille equipment and manual and powered wheelchairs.

Naeger said he originally intended any replacement or repair parts for wheelchairs or other devices also would be exempt, and until recently, he believed that's how the law was interpreted.

The owner of a medical supply business in Springfield, Missouri, however, contacted the former legislator, knowing of his involvement with the legislation, Naeger said, because he was instructed after an audit by the Missouri Department of Revenue he should have been collecting sales taxes on the replacement parts.

"So he came under scrutiny by the Department of Revenue during an audit and was told that while the wheelchair was tax-exempt -- if he sold the wheelchair, it was tax-exempt, but if that same person needed a part for the wheelchair, that he was required to charge sales tax to that disabled person for the wheelchair part," Naeger said. "And obviously, that was never the intent for the law. That was never my intention."

Hoping to clear matters up, he sent a letter in May to the department's director, Nia Ray.

Naeger explained his intent and shared the same message he delivered to colleagues in 1998 when he made the proposals: People with disabilities should not have to pay a tax "for the privilege of mobility independence."

He closed the letter with a request the department reconsider its interpretation.

Two weeks later, Naeger received a response, but not with the answer he expected. The letter, signed by Ray, explained the Missouri Supreme Court determines legislative intent based on the language of the statute. It goes on to explain in reviewing a different sales-tax exemption, the court concluded parts were not exempt because they were not specifically included in that exemption, and the state Supreme Court "repeatedly" has instructed the department to determine legislative intent "solely from the words in the statute."

"Because parts were not included in the wheelchair exemption in Section 144.030.2(19), they are not exempt," the letter says. "Although I believe based on your letter that your intent was to include parts, the intent of a single legislator is not equivalent to the intent of the Legislature."

The Missouri Department of Revenue responded to the Southeast Missourian's questions about the letter with an email stating it is prohibited under state law from discussing confidential taxpayer information regarding the audit of the Springfield medical supply business. It also said letter rulings sent by the department on various tax issues eventually are posted on the department's website with the recipient's information redacted, although the letters between Naeger and the department were not letter rulings.

Naeger said after receiving the letter, he began reaching out to local legislators to inform them of the issue. He said he expects several will be responsive, and helping those with disabilities get needed medical equipment should rise above party lines.

"This shouldn't be a Republican or Democrats thing. This should be a common-sense-for-the-people thing," he said.

srinehart@semissourian.com

388-3641

Pertinent address:

Perryville, Mo.