Missouri sales tax exemption for trucks, highway contractors advances

| 4/17/2006

A Missouri House panel has approved a bill that would modify sales tax exemptions for large trucks and trailers. It also would exempt contractors from paying sales tax on materials bought for highway projects.

The House Ways and Means Committee voted this month to advance a bill – SB629 – that would clarify the common carrier sales tax exemption for the purchase of motor vehicles – with a gross weight of 24,000 pounds or more – or trailers. The bill, which the Senate approved in February, has been sent to the full House for consideration.

Missouri law now applies the exemption only if the common carrier operates solely in interstate commerce.

Sponsored by Sen. Chuck Gross, R-St. Charles, the bill would make the exemption applicable to both intrastate and interstate commerce.

The large-truck provision was added to the bill while in the House panel. It initially only included a provision to exempt contractors from paying sales tax on materials used in Missouri Department of Transportation projects after June 30, 2007.

Gross said if contractors are freed from paying the tax, the department 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.

If approved by House lawmakers, the bill would head back to the Senate for final approval before heading to Gov. Matt Blunt’s desk.