NEWS & EVENTS
Roszak Testifies Before the Missouri Ways and Means Committee Regarding Changes in Tax Exemptions for Missouri Businesses | Dysart Taylor
Tom Roszak testified before the Missouri Ways and Means Committee in favor of two new tax bills that have been submitted for consideration and approval in response to a recent Supreme Court decision that imposes a use tax on the consumables used by commercial laundries even though the laundries charge sales tax on the goods rented to their customers. The case arose out of a sales tax audit during which the Missouri Department of Revenue changed its position regarding the taxation of consumables without providing prior notice of the change of position.
The first tax bill dealt with adding a requirement that the Missouri Department of Revenue has to provide notice of a change in tax policy before it can apply the changed position against taxpayers. Even though the Supreme Court case handled by Mr. Roszak only dealt with commercial laundries, this type of change in taxing policy without notice has been applied by the Missouri Department of Revenue in many other business settings. For example, an article published in the Jan. 26 edition of the Kansas City Star details how a Missouri business owner discovered in 2012 that his fitness club owed six figures in back taxes and penalties due to a Missouri Supreme Court ruling changing the tax-exempt status of his business in 2008. One of the tax bills introduced by Senator Will Krause would require the Missouri Department of Revenue to notify businesses of a change in tax policy before subjecting a taxpayer to tax liability.
The second bill was introduced by Senator Krause to overrule the decision of the Missouri Supreme Court and expressly extend the sales tax exemption authorized by Section 144.054.2 of the Missouri sales tax law to the consumables used by commercial laundries in the cleaning and sanitizing of its goods. Section 144.054.2 provides that in addition to all other exemptions under the sales tax provisions, purchases of machinery, equipment, materials and chemicals used or consumed in sales, manufacturing, processing, compounding, mining or producing any product are exempt from state sales or use tax but not local sales tax. The purpose of the new bill is to expressly recognize that the chemicals and detergents used by commercial laundries are chemicals used or consumed in the processing of a product.