HCS HB 1898 -- TAX ON RETAIL PHARMACIES

SPONSOR:  Ladd Baker (Campbell)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Social
Services, Medicaid and the Elderly by a vote of 8 to 3.

This substitute imposes a tax upon licensed retail pharmacies in
Missouri for the privilege of providing outpatient prescription
drugs.  The tax rate will be determined in accordance with rules
of the Department of Revenue based on monthly gross retail
prescription receipts of pharmacies.  The tax rate cannot exceed
6%.  The Department of Social Services will notify each
individual pharmacy of the amount of quarterly tax due.

The substitute provides for a credit against the tax on
pharmacies for certain taxes paid to the federal government and
provides for offsets against any Medicaid payment due the
pharmacy from the state.

All revenues from the tax will be deposited in the Pharmacy Tax
Fund, created in the substitute.  Moneys in the fund will be used
to provide payments for services related to the Medicaid pharmacy
program.

The provisions of the substitute will expire on June 30, 2003.

The substitute contains an emergency clause.

FISCAL NOTE:  Estimated Net Income to General Revenue Fund of
$31,194,145 in FY 2003, $0 in FY 2004, and $0 in FY 2005.
Estimated Net Cost to Conservation Fund of Unknown in FY 2003, $0
in FY 2004, and $0 in FY 2005.  Totals are expected to exceed
$100,000 annually.  Estimated Net Cost to Highway Fund of
$720,456 in FY 2003, $0 in FY 2004, and $0 in FY 2005.  Estimated
Net Effect on Pharmacy Tax Fund of $0 in FY 2003, FY 2004, and FY
2005.  Revenues and expenditures of up to an estimated
$177,600,000 would net to $0.

PROPONENTS:  Supporters say that the pharmacy tax will allow the
state to draw down additional federal money for the Medicaid
program and as a result help pay for the increase in Medicaid
pharmacy costs to the state.

Testifying for the bill were Representatives Campbell and
Reinhart; Division of Medical Services; and Missouri Pharmacy
Association.

OPPONENTS:  There was no opposition voiced to the committee.

Amy Woods, Legislative Analyst

Missouri House of Representatives
Last Updated October 11, 2002 at 9:02 am