Missouri Republican Gov. Mike Parson’s veto of an omnibus tax bill that would have provided COVID-19 tax relief, including temporary sales and use tax relief for entertainment venues and property tax credits for some residents, has survived the legislature's annual veto session.
During the Senate's September 15 veto session, Senate Ways and Means Chair Andrew Koenig (R) withdrew a motion to override Parson's veto of S.B. 226. Koenig, who sponsored the bill, said, “I will admit, the governor did bring me some language, and I do think that language he brought to me is probably better than what is currently in the bill, and so I look forward to working on that in the next session.”
S.B. 226 is one of four non-budget bills Parson vetoed during the 2021 legislative session. Ultimately, the General Assembly did not override the governor’s veto of any bill. The Missouri House voted during its September 15 veto override session to override the vetoes on some budget items, but the Senate failed to get the votes needed to override those items.
In his July 9 veto letter of S.B. 226, Parson acknowledged the General Assembly’s effort to improve the state’s tax laws but said the bill included “severely problematic” language. He objected to a provision in the bill that would provide a tax credit starting January 1, 2021, to property owners who are residents of cities or counties that impose restrictive orders for more than 15 days a year. Under the bill, restrictive orders would have included ordinances or orders that prohibit or otherwise restrict the use of a taxpayer’s real property, though they would not have included restrictions on property because of public health or safety violations.
Parson said he understands that the provision “was designed to narrowly target small, local businesses harmed by overly intrusive local health measures.” But he said the language of the bill is so broad that nearly anyone living in a city or county could claim the property tax credit — a “significant departure from the current tax structure in Missouri.”
Parson also criticized a provision in the bill that would temporarily allow entertainment venues to deduct and keep 100 percent of state sales or use taxes on purchases of admission tickets to movies, films, and musical performances and on concession sales at the venue. The provision would “subvert sales and use taxes from remittance to the state and instead empower private businesses to keep those taxes,” he said, adding that it “does not broadly serve Missouri’s interests.”
“Entertainment venues were undoubtedly directly impacted by COVID-19, and their presence is vital to our state. However, they were not the only industry that suffered detrimental impacts. There are numerous other affected industries that were not provided this special tax treatment opportunity by the General Assembly,” Parson said.
The legislation would have changed the filing periods for remittance of sales taxes by increasing the thresholds for monthly, quarterly, and annual filing periods, according to a summary of the bill.
It would have also allowed medical marijuana businesses to deduct expenses that would otherwise be allowable as a federal income tax deduction if not for IRC section 280E, which prevents businesses from deducting expenses related to cannabis.