Legislature votes to end double taxation of laundries

JEFFERSON CITY, Mo. — Commercial laundries will no longer be subject to double taxation after the legislature overrode Gov. Nixon’s veto of Senate Bill 20 during Wednesday’s veto session.

The bill 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. Sen. Will Kraus (R-Lee’s Summit), the bill’s sponsor, said the override is a victory for Missouri businesses.

“The successful override of Senate Bill 20 will help these laundries continue to operate in Missouri and will preserve the jobs those businesses provide,” Kraus said. “When taxes are levied by court rulings, it raises costs for businesses and those costs are passed onto consumers.”

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 DOR the ability to tax supplies needed to maintain rental products. The passage of Senate Bill 20 reapplies the statute to the cleaning supplies used by laundries.

It is important to monitor and correct changes in tax law interpretation because the changes can have a large impact on specific industries, Kraus said.

“There are many tax application practices that appear to be of little significance but are actually causing substantial damage to Missouri businesses our economy,” Kraus said. “I am pleased we were able to rectify one by overriding the veto of Senate Bill 20.”