United States

Missouri: Voters to Decide the Fate of Future Services Taxes

Oct 24, 2016
From KPMG TaxWatch

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When Missouri voters go to the polls on November 8, they will decide whether Missouri’s sales and use tax could be expanded to service transactions in the future. Constitutional Amendment 4, aptly titled the “Taxpayer Protection Amendment” would not increase taxes on Missourians, but would prevent future tax increases. Specifically, if approved by voters, the measure would amend the Missouri Constitution to prohibit the Legislature from enacting new state sales or use taxes (or any similar transaction-based taxes) on any service or activity that was not subject to sales or use tax (or a similar tax) as of January 1, 2015. Under Missouri law, sales of tangible personal property are generally subject to sales and use tax, but only a limited number of services are taxable. Over the last several years many state lawmakers, including those in Missouri, have considered expanding the sales tax base as a means of raising revenues, or reducing the state’s reliance on income or property taxes. Proponents of the amendment argue that it will protect Missourians from significant tax increases, such as those proposed in other states that have considered legislation to tax a wide array of services. The ballot language indicates the potential revenue loss, which could be significant, is “unknown.” Arguably, the measure would also limit the Legislature’s ability to revise Missouri’s tax structure in the future. There are a number of business organizations backing Constitutional Amendment 4, including, but not limited to, trade associations for realtors, broadcasters, and bankers. Please stay tuned to TWIST for future updates on Constitutional Amendment 4.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.