Missouri Senate OKs bills on tax breaks for trucks, highway contractors

| 3/19/2007

Two bills that received overwhelming support in the Missouri Senate would offer tax breaks for highway contractors and certain trucks.

Senators voted 34-0 to approve a measure that would 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.

Another bill approved by the Senate on a 32-1 vote 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.

Both bills have been forwarded to the House for further consideration.