Holden proposal would cut common carriers' sales tax exemption

| 1/29/2003

A proposal by Missouri Gov. Bob Holden would end the sales tax exemption for common carriers that buy new trucks, truck parts or pay for truck repairs, the Southeast Missourian reported Jan. 28.

The proposal is part of the governor’s plan to cut an expected $1 billion shortfall in the state’s budget, the newspaper reported.

More than 13,000 new or used trucks or trailers received the tax exemption from Missouri during the first 10 months of last year. Ending the exemption for those and other trucks would raise just under $10 million, according to information contained in the proposal.

Officials at several trucking companies told the newspaper the Holden proposal would cause significant damage to their companies.

Todd Iveson, deputy director of the state Division of Taxation, told the Missourian some trucking firms – for example, moving companies – would still have the exemption. But most would not. Missouri borders two other states that lack common carrier exemptions - Arkansas and Kentucky.

However, Arkansas is currently considering a proposal that would limit the sales tax paid by truck owners. HB1030, which is now under consideration by that state’s House of Representatives, would limit taxes on a tractor to $1,000 and on a trailer to $500.