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Senate seeks to override veto allowing wrongful double taxation

  

JEFFERSON CITY, Mo. – Sen. Will Kraus, R-Lee’s Summit, will pursue a veto override of a bill that is aimed at correcting tax increases caused by a change in sales tax law interpretation.

SB 20 designates that commercial laundries cannot be taxed both on supplies needed to operate the business and the final product of the business. Commercial laundries held this tax exemption for years, until a court decided the rule did not apply to the businesses, said Kraus, the bill sponsor.

“When taxes are levied by court rulings, it raises costs for businesses and those costs are passed onto consumers,” Kraus said. “These tax law reinterpretations hurt job creators and taxpayers, as well as Missouri’s economy.”

The measure easily passed both chambers with bipartisan support during the regular session. Based on that support, Kraus said he plans to pursue a motion to override Senate Bill 20’s veto.

“I believe the bill has the votes to be successful in veto session,” Kraus said. “An override of this veto will be a victory for Missouri job creators.”

The statute in question exempts items used in the manufacturing, processing, compounding, mining, or producing of any product. Previously, large laundries were taxed on items they rented out in the final price of the product, but the chemicals used to clean the rental items were exempt. However, the recent court ruling disqualified the cleaning supplies, giving the Department of Revenue the ability to tax supplies needed to maintain rental products. In his veto letter, the governor stated that he did not believe commercial laundries qualified for the tax exemption on chemicals used in the cleaning of materials.

“I believe that commercial laundries fall under the original interpretation of this law,” Kraus said. “Unfortunately, the courts did not agree, and the businesses are subject to double taxation. An override of this veto will correct this wrongful taxation.”