HCS HB 1202 -- SALES/USE TAX:  OVER-COLLECTION OF TAX

SPONSOR:  Hilgemann (Smith)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Ways and
Means by a vote of 11 to 7.

This substitute 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 or if the amount of refund or credit request does not
exceed $1,000 in the aggregate over any five-year period.

FISCAL NOTE:  Estimated Net Income to General Revenue Fund of
$10,000,000 in FY 2003, $0 in FY 2004, and $0 in FY 2005.

PROPONENTS:  Supporters say that the bill will close a tax
loophole that allows retailers to intentionally over-collect
sales and use taxes from their customers, ask for a refund, and
keep the money for themselves.

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

OPPONENTS:  Those who oppose the bill say that to deny refunds is
one-sided because when a tax deficiency exists, retailers cannot
go back to their customers to recovery the deficiency, and it
must be paid out of their own pocket.  The bill also does not
allow for an offset if there is a tax deficiency within the same
filing period or an audit.

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

Bill Tucker, Assistant Director of Research

Missouri House of Representatives
Last Updated October 11, 2002 at 9:00 am