By Ray McCarty, president/CEO, Associated Industries of Missouri
February 14, 2025 - Here is a quick recap of some of our activities working for you this week, in addition to the articles we previously posted. Although we were active on many more bills, recapping all our activity would take you until this time next week to read, so we will hit the highlights.
Capital Gains Deduction (AIM supports)
HB 594 (Perkins) was passed by the Missouri House this week on a vote of 100-48 and now moves to the Senate for further consideration. The bill provides a deduction for capital gains. SB 46 (Trent), the Senate version of the same bill, is now eligible for debate by the full Senate.
Statute of Limitations (AIM supports)
We told you previously we supported HB 68 (Overcast)Â that would reduce the statute of limitations for personal injury claims from Missouri's unusually long five years to two years. The bill was voted out of the House Rules - Legislative Committee by a vote of 7-2 and is now eligible for debate by the full House of Representatives.
Pipeline Property Tax Depreciation (AIM supports)
We told you previously the Senate Commerce, Consumer Protection, Energy and the Environment Committee passed SB 4 (Cierpiot). That bill was debated briefly by the full Senate and could be taken up again in the near future. This week, the House version of the bill, HB 531 (Hausman), was heard in the House Ways and Means Committee. Ray McCarty, president and CEO of AIM, told the committee the bill is necessary to prevent a tax increase on all Missouri utility users of at least $24 million. The State Tax Commission changed the form used to calculate depreciation without input from legislators, the public, or utilities, establishing a 50-year depreciation schedule with a 20% residual value at the end of 50 years. This will dramatically increase property taxes due from the utilities that are directly passed through to consumers through utility rates. The only serious testimony against the bill in the House hearing, as in the Senate hearing, came from Kenny Mohr, Boone County Assessor, in his role with the Missouri State Assessors Association. AIM is currently investigating how the decision was made to change the form and exploring whether state law was violated by the State Tax Commission. More on that as we learn more.
Tax Reform (AIM opposes and supports)
The Senate Economic and Workforce Development Committee this week heard multiple bills that would cut Missouri's individual income tax to 4% and provide for further reductions if a constitutional amendment is passed authorizing further reduction in the rate by expanding sales and use taxes to services and digital products. AIM supports reducing the individual income tax and supported all the bills that would accomplish that goal, but opposed the constitutional amendments that would expand the sales/use tax base to include services and digital products. AIM president Ray McCarty told the committee that the sales/use tax rate necessary to offset complete elimination of the tax would be extremely high, particularly if the legislature exempted some higher cost services such as home sales, healthcare such as doctor and hospital visits, and other services that may not be popular with Missourians.
Deal Closing Fund Extension (AIM supports)
SB 103 (Bernskoetter) that extends the expiration date of the deal closing fund, an acceleration of benefits available to qualified companies meeting the requirements of the Missouri Works program, was approved by committee this week. The program currently is set to expire June 30, 2025. This act extends the program until June 30, 2031.
Pesticide Labeling (AIM supports)
We previously told you we supported HB 544 (Diehl), providing that federal pesticide labeling requirements will be sufficient. The bill was approved by the House Rules - Administrative Committee by a vote of 7-2 and is now eligible for debate by the full House of Representatives.
Unemployment Benefit Checks and Balances (AIM supports)
This week HB 202 (Casteel) was approved by the House Government Efficiency Committee. Associated Industries of Missouri supports increasing the checks and balances on those claiming unemployment benefits as provided in the bill. Such benefits should be utilized as a temporary measure by people who are unemployed through no fault of their own. If they are not actively seeking work, benefits should be discontinued. While many of the provisions of the bill are already the current practice of the Missouri Dept. of Labor and Industrial Relations, this legislation would codify the controls and protect the integrity of the UI Trust Fund.
Broadband Equipment (AIM supports)
This week, AIM supported two bills dealing with broadband equipment. The first clarifies that equipment used to provide broadband service is exempt from sales and use taxes. Most of this equipment is already used to provide telecommunications services and is already exempt, but HB 743 (Baker) would ensure a future tax auditor does not attempt to apply tax to equipment that is used for broadband internet service. Also, AIM supported HB 661 (Keathley), a bill that provides if the state or a local government requires relocation of a non-regulated utility such as broadband, the state or local government requiring the relocation must pay for the relocation as part of the project cost.
MDNR Funding (AIM supports)
The Air Pollution Control Program (APCP) of the Missouri Department of Natural Resources (MDNR) is facing a projected shortfall in revenues supporting the program of around $3 million. As companies reduce pollution, the amount paid for permits decreases while expenses to operate the program are constantly increasing due to inflation. Also, current statutes allow these permit funds to be "swept" into General Revenue, meaning the funds are not available to support the program. AIM testified such sweeping of funds was illogical and deceitful as permit fees are supposed to be used only to support the program. AIM's idea, codified in SB 120 (Bean), is to stop such sweeping of funds and to earmark a percentage of current sales and use tax revenues collected by utility companies for program support, producing the amount of the projected shortfall. This approach would also provide a hedge against inflation as sales tax revenues generally increase with inflation. The bill was approved by the Senate Agriculture Committee this week by a bipartisan unanimous vote.
We intend to provide these legislative updates to you on a weekly basis on Fridays as we track the progress of these and other bills affecting Missouri businesses.