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GOP lining up against Parson in fight over online sales taxes

GOP lining up against Parson in fight over online sales taxes

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JEFFERSON CITY — Gov. Mike Parson’s fellow Republicans appear poised to scramble his plan to create a special nest egg for financial emergencies.

The proposal to create a $100 million emergency piggy bank would be funded by a tax on online sales, but the latest version of the internet sales tax legislation would instead offset any increase in revenue by lowering individual and corporate income tax rates.

House Speaker Elijah Haahr, R-Springfield, signaled Thursday that the governor’s idea was unlikely to advance in the Legislature’s lower chamber.

“You run into a lot of resistance from the Republican caucus. It would be perceived as a tax increase,” Haahr told reporters during a press conference at the Capitol.

In his proposed $30.9 billion spending plan, Parson said the cash reserve fund would be financed by bringing Missouri in line with 48 other states that tax all online sales.

Parson’s budget office estimates the move will generate up to $80 million annually when fully implemented.

Once the special fund becomes solvent, Parson said, the money could be used to pay off debt and pay for infrastructure programs done on a cost-share basis.

The House, however, is moving in a different direction.

A proposal sponsored by Rep. J. Eggleston, R-Maysville, would require the collection on online sales from out-of-state retailers while adjusting income tax rates annually.

The bill, which was endorsed by a committee earlier this week, would adjust the top income tax rate annually, with the rate going up when sales tax fails to increase and down when sales tax revenues rise.

The adjustments are intended to make the bill revenue-neutral.

“That’s sort of the path that we’re pursuing at this point,” Haahr said.

A similar plan sponsored by Sen. Andrew Koenig, R-Manchester, advanced to the Senate floor Thursday.

Despite Haahr’s statement and the movement of the Koenig and Eggleston bills, the governor’s office said it was “inaccurate” to say the rainy day plan was dead.

Rather, spokeswoman Kelli Jones pointed to another proposal sponsored by Sen. Mike Cunningham, R-Rogersville, that would use internet sales tax proceeds to create the nest egg. Jones said it was significant that Cunningham’s bill was voted out of a Senate committee a day before Koenig’s bill moved.

Senate Majority Floor Leader Caleb Rowden, R-Columbia, said nothing had been decided on which direction the Senate would go.

“There are some final details we’re going to have to iron out. I don’t know that I’ve heard that anybody on any of the sides … is 100% married to their idea come hell or high water. So, we want to get it done,” Rowden said Thursday.

Democrats in the minority, meanwhile, say Republicans should use the proceeds to boost state funding for schools, higher education and social service programs.

“Here we have this opportunity to find this money and do some good with it,” said Senate Minority Leader Gina Walsh, D-Bellefontaine Neighbors.

The legislation is House Bill 1957, Senate Bill 648 and Senate Bill 529.

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