Mo. lawmakers propose sales tax break to spur economy

JEFFERSON CITY, Mo. -- If you're torn over whether to spend or save your federal tax rebate check, Missouri politicians want to give you an extra enticement to go shopping.

A House committee on Thursday endorsed legislation that would exempt all items priced at $600 or less from state and local sales taxes on the weekend of June 27 through June 29.

"We hope they get out and spend and create some economic activity," said sponsoring Rep. Mike Sutherland, R-Warrenton. "This would be an incentive."

Beginning in May, the federal government will send checks of up to $600 to individuals and $1,200 to married couples as part of an economic stimulus package. Households with children will get an additional $300 per child.

Some politicians fear the rebate checks won't produce their intended effect if recipients choose to simply save the money or pay off old debts.

But the Missouri legislation isn't limited to one-time rebates that people will receive from the government. Consumers could make thousands of dollars worth of tax-free purchases during that June weekend, as long as each item they buy is less than $600.

The tax-free shopping weekend is backed by the Missouri Retailers Association.

The provision was added Thursday by the House Ways and Means Committee to a bill supported by Gov. Matt Blunt that would create a "Show-Me Green Tax Holiday" -- one week in November during which no sales tax would be charged on energy-efficient products costing up to $1,500. That shopping list could include big-ticket items such as washers and dryers and smaller necessities such as light bulbs and programmable thermostats.

Blunt said in a written statement later Thursday that he also supports the general tax-free period added by the House "to help families benefit even more from the economic stimulus rebates they will be receiving."

Missouri already provides an annual tax-free shopping period for back-to-school supplies in early August. That law allows cities and counties to continue charging their local sales taxes on school supplies while the state's 4.225 percent tax is suspended.

The tax-free period for energy-efficient products also is drafted to allow local governments to opt out.

But as endorsed Thursday by the House committee, the general sales tax break in June does not include an opt-out provision for local sales taxes.

Some cities that depend on sales taxes already are facing financial struggles. Missouri Municipal League executive director Gary Markenson said it would be "outrageous" if local governments weren't given the ability to opt out of the proposed June tax break.

Sutherland acknowledged that his measure may have to be pared back to ultimately win passage.

Rep. Rachel Storch, D-St. Louis, said she didn't realize when voting for the proposal as a committee member that the tax break applied to each $600 item purchased, rather than a total shopping bill of up to $600.

"We might need to take a second look at the fiscal impact" of lost state tax revenues, she said.

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Tax holiday bill is HB2250.

On the Net:

Legislature: http://www.moga.mo.gov