HCS SS SCS SB 605 -- COUNTY CLASSIFICATIONS AND CITY SALES TAXES

SPONSOR:  Mayer (Stevenson)

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
General Laws by a vote of 14 to 0.

This substitute changes the laws regarding county classification
assessed valuations and city sales taxes.

COUNTY CLASSIFICATIONS

The substitute increases the assessed valuation thresholds for a
county to move into a higher classification.  The minimum
assessed valuation threshold for counties of the first
classification is increased from $600 million to $900 million and
from $450 million to $600 million for counties of the second
classification.  All counties with an assessed valuation of less
than $600 million will be third classification counties.

The governing body of any county of the second classification
which, on August 28, 2010, has had an assessed valuation of at
least $600 million for at least one year may, by resolution of
the county governing body, elect to become a county of the first
classification after it has maintained that valuation for the
period of time required under Section 48.030, RSMo.  Currently,
only the counties of Lincoln and St. Francois qualify.

Any county of the second classification which, on August 28,
2010, has had an assessed valuation of at least $600 million for
at least five years may, by resolution of the county governing
body duly adopted before December 31, 2010, elect to remain a
county of the second classification until the assessed valuation
of the county after 2009 results in placing it in another
classification and it has maintained the necessary valuation for
the period of time required under Section 48.030.  Currently,
only the counties of Christian and Newton qualify.

The required assessed valuation thresholds for changes in county
classification will be increased each year by an amount equal to
the change in the annual average of the federal Consumer Price
Index or zero, whichever is greater.  The State Tax Commission
must calculate and publish the amount so that it is available to
all the counties.

CITY SALES TAXES

Currently, under the general city sales tax law, cities may
impose a sales tax, upon voter approval, at a rate of one-half of
1%, seven-eighths of 1%, or 1%; and the City of St. Louis may
impose the tax at a rate not to exceed one and three-eighths
percent, for the benefit of the city.  The substitute specifies
that the combined rate of sales taxes adopted under the city
sales tax law cannot exceed 2%.  This change is not to be
construed as a new tax or an increase in the current levy of an
existing tax for the purpose of Article X, Section 22, of the
Missouri Constitution, commonly known as the Hancock Amendment,
which requires voter approval.  Cities that have already imposed
and collected taxes under the city sales tax law can continue to
do so without voter approval as a continuation of a tax
previously approved by the voters of the city.

Currently, under the capital improvements city sales tax law,
cities not in St. Louis County may impose a sales tax, upon voter
approval, at a rate of one-eighth, one-fourth, three-eighths, or
one-half of 1% for the purpose of funding, operating, and
maintaining capital improvements.  Municipalities in charter
counties are authorized to impose a capital improvements tax
under Section 94.890.  The substitute specifies that the combined
rate of sales taxes adopted under the capital improvement city
sales tax law cannot exceed 1%.  This change is not to be
construed as a new tax or an increase in the current levy of an
existing tax for the purpose of the Hancock Amendment which
requires voter approval.  Cities that have already imposed and
collected taxes under the city sales tax law can continue to do
so without voter approval as a continuation of a tax previously
approved by the voters of the city.  If any municipality which
has imposed this tax changes or alters its boundaries, the
municipality's clerk must forward to the Director of the
Department of Revenue by registered or certified mail a certified
copy of the ordinance adding or detaching the territory.  Upon
receipt of the ordinance, the taxes will be effective in the
attached territory or abolished in the detached territory on the
effective date of the boundary change.

The substitute contains an emergency clause for the provisions
regarding county classifications.

FISCAL NOTE:  No impact on state funds in FY 2011, FY 2012, and
FY 2013.

PROPONENTS:  Supporters say that many counties wish to remain at
a lower level of classification to avoid additional costs.  It is
wise to adjust the county classification valuation requirements
for inflation.

Testifying for the bill were Senator Mayer; and Missouri
Association of Counties.

OPPONENTS:  There was no opposition voiced to the committee.

Missouri House of Representatives
95th General Assembly, 2nd Regular Session
Last Updated September 14, 2010 at 3:14 pm