Missouri Republicans take second look at tax code changes

JEFFERSON CITY, Mo. -- Republican lawmakers are moving swiftly this session on tax-related bills to add some exemptions, modify the tax code and require the state to notify businesses of changes.

It's not their first attempt at such legislation.

Last year, Gov. Jay Nixon vetoed several bills, saying they would bust the state's budget if allowed to pass, and lawmakers failed to override those vetoes.

The ones that have been filed this year by the larger Republican majority made some changes to the measures to alleviate the governor's concerns, and Nixon said Friday his office is continuing to work with lawmakers.

Here's a look at some of the specific topics found in this session's tax-related measures:

Data storage centers

The state Senate gave initial approval Tuesday to a bill exempting the new or expanding data centers from sales taxes. The bill is different from the version sent to Nixon last year, as businesses must meet minimum job-creation and investment requirements to qualify and would have to repay money if they fell below the requirements after entering an agreement with the state.

Nixon said in his veto last year the broad exemption had no assurance the state would get a return on its investment. But the restrictions in this session's version make the bill palatable to the governor, Republican Sen. Jay Wasson of Nixa, Missouri, said.

Sales tax changes

Supporters of sales tax exemptions for commercial laundries, fitness clubs and utilities say those are needed clarifications after the Department of Revenue changed its interpretation and began collecting "new" taxes on services or products.

Nixon said in his veto letter the exemptions were narrow carve-outs that overturned existing law and would have cost millions in tax revenue.

Sales tax notifications

The revenue department has been practicing "notification by audit," according to Sen. Will Kraus, R-Lee's Summit, meaning the businesses find out they owe sales tax on a service or product they've never charged for before during an audit.

His revised bill, which the Senate passed Thursday, requires the department to contact all business owners who could be affected by a change to sales tax law interpretation if a "reasonable person" would not expect the modification.