Bills on tax breaks for trucks, highway contractors advance in Missouri

| 5/4/2007

Two bills nearing passage in the Missouri General Assembly would offer tax breaks for highway contractors and certain trucks.

The House Rules Committee approved a bill that is intended to reduce the cost of roadwork throughout the state. Sponsored by Sen. Bill Stouffer, R-Napton, the bill – SB199 – would exempt contractors from paying sales tax on materials bought for highway projects.

Supporters of the effort say if Missouri contractors are freed from paying the tax they would be on a level playing field with out-of-state contractors, or those who go elsewhere for their supplies, The Associated Press reported. They also point out the Missouri Department of Transportation would save money because the sales tax paid to the state is factored in when contractors bid on projects.

The change in state law could be worth $37 million for the transportation department during the next three years, according to the latest fiscal analysis on the bill. That money could not be used for non-road needs, including mass transit, railroads or port improvements.

Eliminating the tax is expected to cost the state about $18 million in general revenue in the first year.

The bill’s next stop is the House floor. If approved there, it would head back to the Senate for approval of changes before heading to Gov. Matt Blunt’s desk.

The House and Senate already have approved differing versions of another bill that include a provision to modify sales tax exemptions for large trucks and trailers.

Sponsored by Sen. Gary Nodler, R-Joplin, the bill would clarify the common carrier sales tax exemption for the purchase of motor vehicles, with gross weights of 24,000 pounds or more, or trailers.

Missouri law now applies the exemption only if the common carrier operates solely in interstate commerce. The bill – SB30 – would make the exemption applicable to both intrastate and interstate commerce.

A provision added to the bill in the House would allow common carriers of household goods to file applications to the State Highways and Transportation Commission for approval of rates to reflect increases and decreases in the carrier’s costs.

The bill also would repeal “the exemption that currently allows household goods movers to operate wholly in municipalities, between contiguous municipalities, or commercial zones” without having to obtain operating authority from the Missouri Department of Transportation. Currently, household movers are exempt from the rules and regulations if their operations are restricted to those described areas.

The bill is in a conference committee made up of select members of the House and Senate to work out differences. If they are able to reach agreement, the bill would need one final favorable vote in both chambers before moving to the governor’s desk.