HCS HB 64 -- SALES AND USE TAX HOLIDAY

SPONSOR:  Sutherland

COMMITTEE ACTION:  Voted "do pass" by the Committee on Ways and
Means by a vote of 14 to 1.

This substitute extends the current state and local sales and use
tax holiday for certain clothing, personal computers, and school
supplies purchased during a three-day period each August.  For
the 2005 sales tax holiday, the ability for local governments to
opt out of the holiday is limited to those that opted out of the
2004 sales tax holiday.  After the 2005 sales tax holiday, voter
approval is required for any political subdivision to opt out of
the holiday.

The substitute contains an emergency clause.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of
$1,830,250 in FY 2006, $1,846,710 in FY 2007, and $1,883,644 in
FY 2008.  Estimated Cost on Other State Funds of $739,500 in FY
2006, $754,290 in FY 2007, and $769,376 in FY 2008.

PROPONENTS:  Supporters say that the bill will extend the sales
tax holiday into future years with some changes.  Some stores
claim they had the highest sales days of the year, next to the
Thanksgiving weekend sales.  The bill helps capture sales for
traditional retailers instead of internet retailers.  Missouri
picked up sales from border states during the tax holiday, and
shoppers also purchased gas, food, and other items while
shopping.

Testifying for the bill were Representative Sutherland; and
Missouri Retailers Association.

OPPONENTS:  Those who oppose the bill say that sales taxes are a
major source of revenue for counties and cities, and a sales tax
holiday limits the ability of local governments to provide
essential government services, many of which are required by
state statutes.  Unlike the state, county budgets are on a
calendar year basis; and therefore, the 2005 budget is already
adopted.  Local governments need the ability to opt in rather
than opt out of the holiday.

Testifying against the bill were Missouri Municipal League;
Cooper County Presiding Commissioner; Missouri Association of
Counties; and County Commissioners Association of Missouri.

OTHERS:  Others testifying on the bill say that the 2004 sales
tax holiday was a success.  A written study and slide show was
presented including news clips from tax holiday shoppers.

Others testifying on the bill was Missouri Chamber of Commerce
and Industry.

Karla Strobel, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 1st Regular Session
Last Updated August 25, 2005 at 1:18 pm