Bid to drop highway contractors' tax advances in Missouri

| 3/21/2006

The Missouri Senate has approved a bill that is intended to reduce the cost of roadwork throughout the state.

Senators voted 25-6 to advance a bill that would exempt contractors from paying sales tax on materials bought for highway projects. The bill – SB629 – now heads to the House for further consideration.

The bill’s sponsor, Sen. Chuck Gross, R-St. Charles, said if contractors are freed from paying the tax, the Missouri Department of Transportation could earmark more money for other uses.

The change in state law could be worth $34 million for the transportation department in the first year, The Associated Press reported. 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.