JEFFERSON CITY — Missouri senators pumped the brakes last week on plans to slash the personal property tax and wipe away the state sales tax on grocery items amid concerns the reductions would prove too costly to government.
Action on the two pieces of legislation — Weldon Spring Republican Sen. Bill Eigel’s personal property tax cut and Harrisonville Republican Sen. Rick Brattin’s omnibus tax measure offering relief for firearms purchases and groceries, among other items — was on hold in the Missouri Senate after the bills recently won initial approval.
Senators ended work for the week Thursday without taking final votes on the bills and advancing them to the House. It wasn’t a guarantee that the measures would receive final votes this week, either. With one week left before spring break, Republicans may take up controversial legislation on transgender issues, all but guaranteeing drawn-out debate on the Senate floor.
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In comments to reporters Thursday, President Pro Tem Caleb Rowden, R-Columbia, said eliminating the sales tax on groceries would come at a “tremendous cost to the state.”
Referencing the state’s roughly $5 billion budget surplus, Rowden predicted possibly leaner times in the not-too-distant future.
“We just want to be diligent about all of those things and recognizing that this year, you know, fiscally is a one- or two-off maybe,” Rowden said.
Eigel’s legislation, which senators gave initial approval to on Feb. 21, would exempt vehicles and farm machinery at least 10 years old from the personal property tax.
The bill also cuts the personal property tax assessment rate from 33.3% to 31%. Currently, personal property is assessed at a third of its real value, which local governments then tax.
A nonpartisan fiscal analysis said the legislation could cost local governments nearly $500 million by the 2026 fiscal year with the price tag potentially reaching more than $628 million in fiscal 2030.
Asked Thursday if the half-billion-dollar cost was a stumbling block, Rowden said, “Yeah, I would assume so.”
He said much of the money would come from local governments.
“They’re going to tell us they don’t love that, right?” the Senate president said. “So I spoke to the Municipal League a couple of weeks ago. I said we want to do something in this space; we’re not trying to pull the rug out from under anybody’s ability to pay their police and fire.”
The analysis said 64% of registered vehicles in the state — vehicles with a model year of 2014 or older — would be exempt from the personal property tax in the 2024 tax year.
Sen. Mary Elizabeth Coleman, R-Arnold, attached the sales tax exemption on groceries to Brattin’s legislation on tax relief for firearm purchases.
The bill would exempt certain grocery items from the state sales tax, which stands at 1.225% for non-prepared foods. Of that, 1% goes to the School District Trust Fund, 0.125% to conservation, and 0.1% to parks, soils and water funds.
Brattin’s tax bill states sales of firearms and ammunition made in Missouri would be exempt from all taxes. The proposal also would provide a tax credit for those selling firearms and ammunition to offset federal excise taxes they pay.
“Levying these taxes upon a constitutional right is one that we need to definitely protect. Taxation is a hindrance limiting the ability of people to exercise that right,” Brattin said.
Although Democrats opposed the underlying legislation, Sen. Lauren Arthur, D-Kansas City, tacked on a second amendment that would exempt diapers from sales taxes.
The legislation also exempts feminine hygiene products — including tampons, pads, liners, and cups — from the sales tax, as well as wheelchairs, parts and accessories. The act also applies a sales tax exemption to certain medical devices.
A legislative analysis said the final plan’s total cost to the state could top $373 million per year starting in fiscal 2025.
Largely due to the elimination of the food sales tax, local governments could lose $1.5 billion annually.
“I think that the bill sponsor and some of the other people in the Senate chamber kind of want to take a little closer look at that,” said Senate Majority Leader Cindy O’Laughlin, R-Shelbina, said of Brattin’s legislation. “I think there’s going to be more discussion about it.”
The legislation is Senate Bill 8 and Senate Bill 131.