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Missouri Moving Toward Streamlined Sales Tax


 Missouri: streamlined sales tax legislation may end exemption for prescription drugs

UPDATE, 6.11.13: Missouri Governor Jay Nixon (D) has vetoed HB 253, calling it "an ill-conceived, fiscally irresponsible experiment that would hurt our economy and jeopardize funding for vital public services." The governor said, "Missouri is a low-tax state--and we're going to keep it that way."

Federal lawmakers have yet to determine the fate of the Marketplace Fairness Act of 2013 (MFA); since its passage in the Senate, it has been waiting on the table of the House. Yet instead of passively waiting in the wings, some states are actively working to simplify their tax laws. Only states with simplified sales tax laws will be able to take advantage of MFA should it pass.

Last week, Colorado Governor John Hickenlooper (D) signed into law HB13-1295, legislation that implements "the minimum simplification requirements of the proposed federal 'Marketplace Fairness Act of 2013'…." If and when MFA passes, Colorado will be well-placed to take advantage of it.

Now streamlined sales and use tax agreement with one or more states to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance for all sellers and for all types of commerce…."

Governor Nixon (D) has expressed concern that HB 253 "would eliminate the current sales tax exemption of prescription drugs…." The bill would repeal section 144.030 RSMo, which specifically exempts from sales and use tax "all sales of drugs which may be legally dispensed by a licensed pharmacist…[and] all sales of over-the-counter drugs as prescribed by a health care practitioner licensed to prescribe."

In a press release, the governor notes:

"The out-of-pocket cost of prescription drugs… already puts a strain on many Missouri families…. If enacted this provision would impose a $200 million sales tax hike on Missourians and increase the cost of the medications they need. This is a tax increase that Missourians cannot afford and don't deserve."

As of this writing, HB 253 is still under review. The governor has neither signed it nor rejected it.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.