Tackling Tax Issues
Wed, 03/17/2021 - 11:44am admin
by Sen. Karla Eslinger (R-33)
We’ve reached the half-way mark in the 2021 legislative session this week, and the Senate advanced several important pieces of legislation before leaving for our mid-term recess. Two bills perfected in the Senate chamber relate to taxation. Nobody likes paying taxes, but I believe addressing obvious shortcomings in our taxation system is the fiscally sound course of action. In my opinion, the Senate moved in that direction this week.
Senate Bill 153 is the so-called “Wayfair Bill.” This legislation, so named because of a 2018 U.S. Supreme Court decision, will require online merchants to collect sales tax on internet purchases made by Missouri consumers. Currently, Missourians pay sales tax on some online purchases but not on others, depending on whether the merchant has a “nexus” in our state. Amazon, for example, collects sales tax because it has distribution centers in Missouri. Sellers without a physical presence in our state do not. The current system is full of inconsistencies and confusion.
The larger issue is the unfair competitive advantage cyber merchants have over brick-and-mortar businesses in Missouri. Because some online sellers don’t have to collect sales tax, their bottom-line price is almost always going to be lower than what a store operating in our communities has to charge. Consequently, the out-of-state merchant makes the sale, while the downtown business suffers, and no tax revenue comes in to support essential services in Missouri. Senate Bill 153 levels the playing field and eliminates the advantage internet-based businesses have over Main Street merchants.
Another bill passed by the Senate this week would increase Missouri’s fuel tax, the primary source of funding for roads and bridges. It’s important to note that just like the Wayfair legislation, this bill is still a work in progress, and will need to be passed by the House before going to the governor’s desk. Missouri hasn’t raised the gas tax since 1996, despite ever-increasing road construction and maintenance costs. At 17.4 cents per gallon, Missouri’s fuels tax is the second-lowest in the nation, according to the American Petroleum Institute, while we rank seventh in the number of road miles under state maintenance. Senate Bill 262 phases in a 12.5 cents per gallon increase in Missouri’s gasoline and diesel fuels taxes. The tax would go up 2.5 cents per gallon each year until 2025, at which point we would pay 29.5 cents per gallon – still much lower than most states. But wait, there’s a provision in the bill that says you don’t actually have to pay the increased tax. If your vehicle weighs less than 26,000 pounds (in other words, any normal passenger vehicle) you can apply for a refund. If you’re willing to save your receipts and submit a form, you won’t have to pay the extra tax.
Another tax proposal was the subject of lengthy debate on the Senate floor this week. Senate Bill 24 would have eliminated personal property taxes in Missouri. Who wouldn’t want that, right? As attractive as that idea sounds in theory, I believe the consequences could be dire. Local schools receive most of their funding from personal property taxes. Many other essential services, such as police and fire departments, also rely on this funding. The measure was eventually tabled, but I suspect we’ll take it up again later in the session.
In committee action this week, I presented Senate Joint Resolution 16 to the Agriculture Committee. This is my proposal to amend Missouri’s Constitution to guarantee the right to hunt and fish. A hearing on Senate Joint Resolution 15, which protects the right to bear arms for hunting and sport shooting, was postponed after floor debate went longer than expected. I hope to present that measure after we return from spring recess. The Appropriations Committee continued its work hearing testimony from state agencies. Serving on this committee has provided a thorough education on state spending, as we review every line of the state operating budget. This week, we held hearings on the Department of Elementary and Secondary Education, the Department of Higher Education and Workforce Development and the Department of Public Safety, including the Highway Patrol and State Fire Marshal’s Office.
Also this week, I was pleased to welcome a number of visitors to the District 33 Capitol office. I had the opportunity to meet with members of the Missouri Cattlemen’s Association from Howell County, as well as several educators from the district. Thanks to Jon Wilson, an agriculture instructor from Gainesville High School, and Dr. Karl Janson, superintendent of the Cabool School District for stopping by.
Although the Senate won’t be in session next week due to our mid-term recess, I’ll be traveling the district giving legislative updates and meeting with constituents. I look forward to hearing what’s on the minds of our hard-working folks back home. We return to Jefferson City on March 22 to continue work on Senate legislation. We’ll also begin hearing House bills in committee as we work toward the close of session on May 14.
It is my honor to serve the residents of Douglas, Howell, Oregon, Ozark, Ripley, Texas, Webster and Wright counties in the Missouri Senate, and it’s always a pleasure to hear from friends and family back home. If I can help you in any way, please call my Capitol Office at 573-751-1882, or my District Office at 417-596-9011. You can also visit my webpage at www.senate.mo.gov/mem33, on Facebook: @SenatorKarlaEslinger, or follow me on Twitter: @seneslingermo.