CCS SS SCS HB 491 -- TAXATION

This bill reduces the state sales tax rate on food which is
authorized under the federal food stamp program to be purchased
with food stamps.  The reduction is 3%.  This will change the
total state sales tax on qualifying food (including the two
constitutional sales taxes) from 4.225% to 1.225%.  Sales
through vending machines will qualify for the reduced rate.  All
local sales taxes will continue to be charged on these food
items.  The reduction is effective October 1, 1997.  Any
retailer who collects the reduced tax rate on food may apply for
and receive a refund from the Department of Revenue equal to 3%
of the tax collections on qualifying food for cost of
administration.  This provision will expire on September 30,
1998.

The bill also authorizes a state income tax deduction for any
retirement allowance from any privately funded source received
beginning January 1, 1998.  The deduction for tax year 1998 is
set at a maximum of $1,000, for tax year 1999 a maximum of
$3,000, for tax year 2000 a maximum of $4,000, for tax year 2001
a maximum of $5,000, and for tax year 2002 and beyond a maximum
of $6,000.  The deduction is limited to single taxpayers with
Missouri adjusted gross income of $25,000 or less or married
taxpayers with combined Missouri adjusted income of $32,000 or
less.

This bill also authorizes state credits to taxpayers equal to
50% of any contribution to a qualified maternity home or a
qualified shelter for victims of domestic violence.  The
taxpayer is allowed a tax credit against any individual income,
corporate income, corporate franchise, financial institutions,
or express company tax liability.  The credit may be carried
over for 4 years, but may not exceed tax liability in any one
year.  The bill requires the Department of Health (for maternity
homes) and the Department of Public Safety (for shelters for
victims of domestic violence) to apportion the tax credit among
all qualified facilities.

The portion of the bill pertaining to tax credits will become
effective January 1, 1998.

In addition, the bill exempts from state and local sales taxes
all sales of medical oxygen sold at retail.

HB 491 -- SALES/USE TAX (Gaw)

This bill reduces the state sales tax rate on food which is
authorized under the federal food stamp program to be purchased
with food stamps.  The reduction is 3%.  This will change the
total state sales tax on qualifying food (including the two
constitutional sales taxes) from 4.225% to 1.225%.  All local
sales taxes will continue to be charged on these food items.

The bill also allows any retailer who collects the reduced tax
rate on food to apply for and receive a refund from the
Department of Revenue equal to 3% of the tax collections on
qualifying food for cost of administration.  This provision will
expire on June 30, 1999.

This bill contains an emergency clause.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of
$216,714,937 in FY 1998, $234,612,250 in FY 1999, & $239,193,613
in FY 2000.

HB 491, HCA 1 -- SALES/USE TAX

SPONSOR:  Gaw

COMMITTEE ACTION:  Voted "do pass" by the Committee on Ways and
Means by a vote of 22 to 1.

This bill reduces the state sales tax rate on food which is
authorized under the federal food stamp program to be purchased
with food stamps.  The reduction is 3%.  This will change the
total state sales tax on qualifying food (including the two
constitutional sales taxes) from 4.225% to 1.225%.  All local
sales taxes will continue to be charged on these food items.

The bill also allows any retailer who collects the reduced tax
rate on food to apply for and receive a refund from the
Department of Revenue equal to 3% of the tax collections on
qualifying food for cost of administration.  This provision will
expire on June 30, 1999.

This bill contains an emergency clause.

HCA 1 -- Clarifies provisions related to the additional
collection fee for retailers who sell food.

FISCAL NOTE:  Estimated Net Reduction to General Revenue Fund of
$216,714,937 in FY 1998, $234,612,250 in FY 1999, and
$239,193,613 in FY 2000.

PROPONENTS:  Supporters say that this measure will reduce
revenues in a sufficient amount to avoid exceeding the "Hancock"
lid and is the quickest and fairest method to provide tax relief
to the general public.

Testifying for the bill were Representative Gaw; the Governor's
Office; the Missouri Retailer's Association; Missourians for Tax
Justice; Missouri Association for Social Welfare; and United
Auto Worker's Union.

OPPONENTS:  Those who oppose the bill say that businesses should
share in the tax relief because the tax revenues they pay to the
state are part of the revenues exceeding the "Hancock" lid.
They also feel a straight reduction in the state sales and use
tax rate is the fairest way to return the excess.

Testifying against the bill were Taxpayer's Research Institute
of Missouri; and Missouri Chamber of Commerce.

Bill Tucker, Research Analyst

HB 491 -- Sales/Use Tax

Sponsor:  Gaw

This bill reduces the state sales tax rate on food which is
authorized under the federal food stamp program to be purchased
with food stamps.  The reduction is 3%.  This will change the
total state sales tax on qualifying food (including the two
constitutional sales taxes) from 4.225% to 1.225%.  All local
sales taxes will continue to be charged on these food items.

The bill also allows any retailer who collects the reduced tax
rate on food to apply for and receive a refund from the
Department of Revenue equal to 3% of the tax collections on
qualifying food for cost of administration.  This provision will
expire on June 30, 1999.

This bill contains an emergency clause.