HB 1442 -- CITY SALES TAXES

SPONSOR:  Jones (89)

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
General Laws by a vote of 13 to 0.

Currently, under the general city sales tax law, cities may
impose a sales tax, upon voter approval, at a rate of one-half of
1%, seven-eighths of 1%, or 1%; and the City of St. Louis may
impose the tax at a rate not to exceed one and three-eighths
percent, for the benefit of the city.  This bill specifies that
the combined rate of sales taxes adopted under the city sales tax
law cannot exceed 2%.  This change is not to be construed as a
new tax or an increase in the current levy of an existing tax for
the purpose of Article X, Section 22, of the Missouri
Constitution, commonly known as the Hancock Amendment, which
requires voter approval.  Cities that have already imposed and
collected taxes under the city sales tax law can continue to do
so without voter approval as a continuation of a tax previously
approved by the voters of the city.

Currently, under the capital improvements city sales tax law,
cities not in St. Louis County may impose a sales tax, upon voter
approval, at a rate of one-eighth, one-fourth, three-eighths, or
one-half of 1% for the purpose of funding, operating, and
maintaining capital improvements.  Municipalities in charter
counties are authorized to impose a capital improvements tax
under Section 94.890, RSMo.  The bill specifies that the combined
rate of sales taxes adopted under the capital improvement city
sales tax law cannot exceed 1%.  This change is not to be
construed as a new tax or an increase in the current levy of an
existing tax for the purpose of the Hancock Amendment which
requires voter approval.  Cities that have already imposed and
collected taxes under the city sales tax law can continue to do
so without voter approval as a continuation of a tax previously
approved by the voters of the city.

FISCAL NOTE:  No impact on state funds in FY 2011, FY 2012, and
FY 2013.

PROPONENTS:  Supporters say that the bill clarifies existing law
regarding the enactment of multiple sales taxes for the purpose
of capital improvements or general revenue.  The Department of
Revenue has authorized "stacking" of taxes in these areas if
approved by voters pursuant to its interpretation of existing
state statutes.  Uncertainty in the application of the law
prevents possible funding for municipal projects, and an
unfavorable court decision would be harmful to the finances of
the cities of Joplin and St. Joseph which have relied upon the
department's position.  Circuit courts are split on the issue of
"stacking" taxes.  Currently, all litigation against
municipalities has been dismissed without prejudice.

Testifying for the bill were Representative Jones (89); Bill
Head, Joplin City Attorney; and St. Joseph Area Legislative
Coalition.

OPPONENTS:  There was no opposition voiced to the committee.

Missouri House of Representatives
95th General Assembly, 2nd Regular Session
Last Updated September 14, 2010 at 3:10 pm