HB 286, HCA 1, 2 -- SALES AND USE TAX REFUNDS

SPONSOR:  Smith

COMMITTEE ACTION:  Voted "do pass" by the Committee on Ways and
Means by a vote of 12 to 2.

This bill requires that any request for a refund of sales taxes
by a person who collects and remits the tax will only be granted
if the person demonstrates to the satisfaction of the Director
of the Department of Revenue that the amount will be refunded or
credited to the person who originally paid the sales tax.  The
restriction will not apply if the person seeking the refund
shows to the director's satisfaction that he or she originally
paid the tax and that it was not collected from the purchasers.

HCA 1 -- Exempts annual and quarterly tax filers from the refund
requirement.

HCA 2 -- Requires deposit of any proceeds from the bill into the
Mental Health Trust Fund.

FISCAL NOTE:  Estimated Net Revenue to General Revenue Fund of
$22,000,000 in FY 2002, $0 in FY 2003, and $0 in FY 2004.

PROPONENTS:  Supporters say that this loophole has allowed tax
consultants, for a fee, to assist retailers in intentionally
over collecting sales and use taxes from consumers.  The over
collections are then kept by the retailer.  Over $20 million
annually has been over collected.  It is time to provide a
disincentive for this activity.

Testifying for the bill were Representative Smith; State
Auditor's Office; and Department of Revenue.

OPPONENTS:  Those who oppose the bill say that this proposal
will hurt businesses who unintentionally over collect taxes.
The bill should include a provision that does not allow the
Department of Revenue to retroactively assess tax delinquencies
when a change in policy or regulation changes the taxation of
goods or services.

Testifying against the bill were Associated Industries of
Missouri; and Missouri Chamber of Commerce.

Bill Tucker, Assistant Director of Research

Missouri House of Representatives
Last Updated November 26, 2001 at 11:43 am