HCS SCS SB 199 & 207 -- TRANSPORTATION TAX EXEMPTIONS

SPONSOR:  Stouffer (Faith)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Ways and
Means by a vote of 7 to 0.

This substitute changes the laws regarding transportation tax
exemptions.  In its main provisions, the substitute:

(1)  Exempts fuel sold to school districts from the motor fuel
tax when the bus is driven to transport students for educational
purposes;

(2)  Authorizes an exemption from the motor fuel tax for motor
fuel sold for use by an interstate transportation authority, a
city transit authority, or a city utilities board to operate a
public mass transportation facility;

(3)  Authorizes, beginning July 1, 2008, a sales tax exemption on
materials purchased by contractors for use in the construction of
highways and other Department of Transportation projects;

(4)  Changes the definition of "commercial aircraft" by lowering
the maximum certified gross take-off weight from 7,000 to 3,500
pounds as it relates to the taxation of aircraft; and

(5)  Requires the Department of Revenue to simplify the motor
fuel exemption process by reducing the administrative burden,
reducing the time to receive a refund, and dividing the
administrative burden between the fuel wholesaler/retailer and
the tax exempt entity.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 in
FY 2008, $12,870,000 in FY 2009, and $9,433,500 in FY 2010.
Estimated Effect on Other State Funds of a cost of $2,712,000 in
FY 2008, an income of $17,925,000 in FY 2009, and an income of
$12,174,499 in FY 2010.

PROPONENTS:  Supporters say that Missouri suppliers are trying to
compete with out-of-state suppliers of materials for Department
of Transportation projects and the sales tax gives Missouri
suppliers a disadvantage of 1.5% to 4%.  Local sales tax is the
difference.  Use tax is the same as the state sales tax rate
only, and sales tax is both state and local tax rates.  Sales tax
is a pass-through item so that out-of-state contractors don't
have to add as much onto their contracts.  Missouri contractors
are suffering from this inequity.  The bill will provide more
money in the road fund and end the market disadvantage to
Missouri suppliers by leveling the playing field.

Testifying for the bill were Senator Stouffer; Associated
Industries of Missouri; Taxpayers Research Institute of Missouri;
Associated General Contractors of Missouri, Incorporated; Heavy
Constructors Association of Greater Kansas City; Associated
General Contractors of St. Louis; Missouri Asphalt Pavement
Association; and Missouri Chamber of Commerce and Industry.

OPPONENTS:  There was no opposition voiced to the committee.

Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:21 am