HCS HB 2302 -- STREAMLINED SALES AND USE TAX AGREEMENT

SPONSOR:  Sutherland

COMMITTEE ACTION:  Voted "do pass" by the Committee on Ways and
Means by a vote of 9 to 2.

This substitute requires the Department of Revenue to establish
the necessary rules to implement the compliance provisions of the
multistate Streamlined Sales and Use Tax Agreement.  The
substitute specifies that:

(1)  When a political subdivision changes the rate of tax, the
rate change must take effect on the first day of the second
calendar quarter after the Director of the Department of Revenue
receives notice of the change;

(2)  When a city annexes or detaches property, the city clerk
must forward a certified copy of the ordinance to the department
director within 10 days.  The tax rate in the added or abolished
territory must be effective on the first day of the second
calendar quarter after the department director receives notice of
the boundary change;

(3)  When a city changes the rate of tax, the change to the tax
rate will take place on the first day of the second calendar
quarter after the department director receives notice of the rate
change;

(4)  If a political subdivision repeals an existing tax, the
repeal must become effective December 31 of the calendar year in
which the abolishment of the tax was approved.  The political
subdivision must notify the department director prior to the
effective date of the repeal; and

(5)  When an entity remits the tax authorized under Section
67.1959, RSMo, it will no longer receive a reduction in its sales
tax liability for transactions with businesses that also collect
a local tourism tax.

The substitute requires:

(1)  The department director to perform all functions regarding
the administration, collection, enforcement, and operation of all
sales taxes;

(2)  The department to provide electronic databases for tax
jurisdiction boundary changes, tax rates, and a taxability matrix
detailing taxable property and services;

(3)  All state and local sales taxes to have the same base which
means that exemptions at the state and local level must be
identical;

(4)  A seller to be allowed a deduction from taxable sales for
bad debts attributable to taxable sales that are uncollectable;

(5)  The definitions for "delivery charges," "food," "lease or
rental," "purchase price," "sales price," "tangible personal
property" and other definitions to be adopted as defined in the
streamlined agreement;

(6)  The department to be able to require any seller to
electronically file and remit sales and use taxes;

(7)  The on-line registration for out-of-state sellers to be
simplified and no bond to be required;

(8)  No caps or thresholds to exist on the collection of sales or
use taxes;

(9)  Out-of-state sellers to be offered uniform, simplified
electronic filing;

(10)  Amnesty to be available to certain out-of-state sellers
with uncollected or unpaid sales or use tax if the seller was not
registered in Missouri in the prior 12-month period before the
effective date of the streamlined agreement; and

(11)  A monetary allowance of up to 2% of the amount of
remittance to sellers and certified services providers for
collecting and remitting the state and local sales taxes.

The substitute becomes effective January 1, 2012.

FISCAL NOTE:  Estimated Effect on General Revenue Fund of an
income of $0 in FY 2011, a cost of $144,156 to an income of More
than $100,000 in FY 2012, and a cost of $133,102 to an income of
More than $100,000 in FY 2013.  Estimated Income on Other State
Funds of $0 in FY 2011, More than $100,000 in FY 2012, and More
than $100,000 in FY 2013.

PROPONENTS:  Supporters say that the bill makes sales and use tax
laws in different states similar to help ease compliance with the
laws.  Today most shopping is done online or with a catalog
rather than at a local merchant.  All purchases through the
Internet or by phone are subject to a sales tax or a use tax.
The use tax is voluntary and is not currently collected.  The
current law puts local merchants at a loss.  The bill will even
the playing field.  The agreement is voluntary so that businesses
can choose whether to participate.  An estimated $400 million in
revenue is not collected because the sales are remote sales to
Missourians.  It will bring in an estimated $15 to $20 million in
general revenue immediately because of the 1,200 retail companies
that have already signed onto the agreement in other states.
Twenty-three participating states have agreed on similar rules,
and several other states are considering it.  If passed
federally, all retailers will be required to collect the tax, and
Missouri could collect about $430 million annually.  The bill
will increase state revenues, allow more adequate funding for
vital services such as education, and ensure that the sales tax
is fair to in-state businesses.  The fair tax and the bill are
complementary and could reduce the rate needed for the fair tax.

Testifying for the bill were Representative Sutherland; Honorable
Christopher Rants, Iowa House of Representatives; Missouri
Retailers Association; Missouri National Education Association;
and Missouri Budget Project.

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 3:13 pm