Election 2016: Pros and cons of Missouri’s Amendment 4, covering new taxes on services, transactions | St. Louis Public Radio

Election 2016: Pros and cons of Missouri’s Amendment 4, covering new taxes on services, transactions

Nov 2, 2016

On Tuesday, Nov. 1, St. Louis on the Air hosted a moderated conversation in the Community Room at St. Louis Public Radio about Amendments 3, 4 and 6 as well as Proposition A. This was in an effort to inform voters on statewide ballot issues they would see on their Nov. 8 ballot.

The first part of the conversation centered on Constitutional Amendment 4, which would prohibit a new state sales or use tax on any service or transaction that was not subject to a sales or use tax as of January 1, 2015. This could include such services as health care, real estate, haircutting, landscaping, accounting and many others.

We heard from one proponent and one opponent of the measure. Scott Charton, a spokesperson for Missourians for Fair Taxation, represented the “pro” side of the argument. Amy Blouin, the executive director of the Missouri Budget Project, represented the “con” side of the argument. Below, you’ll find a summary of their arguments.

Want an in-depth, objective analysis of what the amendment would do? Read this story from St. Louis Public Radio’s Jo Mannies: “Amendment 4: Realtors lead pre-emptive strike against expanding sales taxes to include services.

You can listen to the full conversation here:

Below, please find major “pro” and “con” arguments and points of consensus summarized.

CONSENSUS:

  • Neither Charton nor Blouin want to see sales taxes broadly applied to services.
  • Neither Charton nor Blouin want to see income tax replaced solely with sales tax.

PRO: Scott Charton hopes people will vote “yes” on Constitution Amendment 4. Here are his main points:

Scott Charton is a proponent of Missouri's proposed Constitutional Amendment 4.
Credit Kelly Moffitt | St. Louis Public Radio

  • The amendment would ensure through a constitutional amendment that no new sales taxes would be applied to services or transactions without tangible commodities.
  • Other states, like North Carolina, have passed new sales taxes on services like car repair, that means people are paying sales tax on both equipment and an individual’s services.
  • The Missouri legislature for the last seven sessions has tried to expand sales tax to services in some way.
  • Sales tax is a regressive tax that would hurt lower income and fixed income individuals more than wealthier individuals — expanding taxes to services would make the tax load higher on individuals
  • Charton does not want a sales tax to be applied to services because that would be a way to dramatically increase sales tax revenue to the state, making it easier to eliminate the income tax, which Charton does not support.
  • This would not impact taxes on goods or other special taxes like that of conservation.
  • The Missouri Broadcasters Association and the Missouri Press Association endorsed the amendment.  [Editor’s note: St. Louis Public Radio is a member of the Missouri Broadcasters Association, but does not endorse nor oppose any amendment or proposition.]

Essentially, Charton hopes the people of Missouri will amend the constitution as a fail-safe to make sure services and formerly untaxed items will not be taxed in a future effort to increase state revenue or eliminate the income tax.

Charton encourages people to visit http://motaxpayerprotection.com/learn/ for more “pro” points.

CON: Amy Blouin hopes people will vote “no” on Amendment 4. Here are her main points:

Amy Blouin does not support Missouri's proposed Constitutional Amendment 4.
Credit Kelly Moffitt | St. Louis Public Radio

  • The constitutional amendment has unintended consequences because of changing business structures that are moving goods transactions online.
  • This amendment would make it impossible for a sales tax to be added to online transactions or music downloads, which have replaced in-store purchases that could formerly be taxed.
  • In the future, more commodities could move to be purchased online without sales tax and localities and the state would not get that sales tax revenue that was previously collected.
  • Expanding sales tax to apply to services would require a vote of the people; this amendment is not the only way to protect against sales tax on services.
  • Another constitutional amendment could go on the ballot that would override this one about sales tax on services; this amendment does not completely protect citizens from sales tax on services.
  • The Missouri Municipal League and the Missouri Budget Project do not endorse this amendment.

Essentially, Blouin hopes the people of Missouri will vote not to amend the constitution because amending the constitution could have long-term unintended consequences that reduce the amount of sales taxes that could be collected from goods as business moves from brick-and-mortar stores to online transaction. She does not support widespread sales tax applied to services and sees that as unrelated to this amendment.

Blouin encourages people to visit http://www.mobudget.org/ for more “con” points and alternate ideas to make sure sales tax is not applied to services in the future.

Want to read more pro/cons about Missouri ballot measures? Read these perspectives about Constitutional Amendment 6. 

St. Louis on the Air brings you the stories of St. Louis and the people who live, work and create in our region. St. Louis on the Air host Don Marsh and producers Mary Edwards, Alex Heuer and Kelly Moffitt give you the information you need to make informed decisions and stay in touch with our diverse and vibrant St. Louis region.