JEFFERSON CITY, Mo. – Speaker Pro Tem Elijah Haahr’s tax bill, HB 2540, has officially passed out of committee, though not without some changes.
Presenting his bill for the second time, Haahr introduced a substitute version of the bill, which the House Ways and Means Committee voted out of committee with a 6-3 vote on Monday afternoon.
A number of changes were made, though Haahr noted they were small changes.
“I’m happy with the bill, happy with the substitute, and happy with the vote,” Haahr said.
The only amendment made that day, however, was from Rep. Paul Curtman, which sought to change the name of the “Dept. Of Revenue” to the “Dept. of Taxation and Revenue” in the bill’s language.
Rep. Brandon Ellington’s amendment seeking to restore the circuit breaker tax credit was shot down, with Chairman Curtman noting that Haahr had made a good point in the previous week when he said that the current usage of the circuit breaker was not the original intent.
As part of the changes to Haahr’s more than 400-page bill, they put back the two-percent early filing discount, allowing up to $1,000 per month, mirroring what Arkansas does.
They removed the portion that would have consolidated the Department of Corrections’ maintenance with the Office of Administration, added a section that would change the policy for competitive bidding for the state, clarified state exemptions to match what happened at the federal level, and cleaned up the definitions of certain medical equipment. They also added language on the streamline sales tax portion agreement, noting that there was a case before the Supreme Court that could eliminate the need for Missouri to join a streamline sales tax compact.
He said the goal was to find parity, not only between businesses and people but also ensuring that out-of-state and online retailers pay the same as in-state sellers in taxes.
As for the potential costs and savings, Haahr looked to the harshest critics of the bill to provide some answers.
“Every group scores it a little differently,” Haahr said. He said that the Missouri Budget Project had scored the bill the lowest in terms of effects to the state budget, which placed it at about $150 million in the positive for state revenues, with a general revenue hit of roughly $130-140 million.
“If we don’t do anything with my bill, in two or three years when SB 509 is fully implemented, we’re going to be several hundred million negative to general revenue,” Haahr said. “If we pass mine, we’ll be about $150 million better than we would be with SB 509.”
Haahr said the goal was to do four things:
- Put Missouri in the top ten in the country for lowest income tax
- Put Missouri in the top ten in the country for lowest business tax
- Fix the road fund
- Do all of this in a financially stable and solvent way for the state
He said he believed that with the substitute passed out of the committee, they were hitting all marks on the checklist.
The bill passed with a 6-3 margin, with Reps. Ellington, Brown, and Mosley in opposition, and now will head to the Rules committee, and if passed there, it would head to the floor of the House.