A tax on lawn care? Never, if Missourians vote to ban sales taxes on services
Missourians are slated to vote on a constitutional amendment that would ban sales taxes on services.
Missouri Secretary of State Jason Kander certified the measure, known as Amendment 4, last week for the Nov. 8 ballot. The relatively short amendment says:
“In order to prohibit an increase in the tax burden n the citizens of Missouri, state and local sales and use taxes (or any similar transaction-based tax) shall not be expanded to impose taxes on any service or transaction that was not subjected to sales, use or similar transaction-based tax on January 1, 2015.”
So what does that mean? According to Scott Charton, a spokesman for the group that’s pushing the measure, Amendment 4 would prospectively ban a governmental entity from enacting a sales tax on a service — such as lawn mowing, plumbing or going to the dentist.
While many services in Missouri aren’t subjected to sales taxes right now, Charton said that idea gained traction in other states.
“Those who oppose a new sales tax on services think that is too close for comfort,” Charton said. “So Amendment 4 is a pre-emptive strike to stop sales taxes on services. Politicians borrow bad ideas. Other states such as North Carolina and Washington have implemented sales taxes on services just this year. Our neighboring states of Oklahoma and Illinois have had lawmakers discussing sales taxes on services to close some pretty significant budget holes.”
The Missouri Association of Realtors provided much of the funding to gather signatures to get Amendment 4 on the ballot. Charton said the coalition supporting the measure includes a number of trade groups, including the Missouri Bankers Association and the National Federation of Independent Businesses.
(Charton also said that the Missouri Press Association and the Missouri Broadcasters Association “have come out and voiced strong public support for Amendment 4 because advertising is a service.”)
“Sales taxes hit low and middle income families the hardest,” Charton said. “Amendment 4 protects those who are least able to afford new taxes, including senior citizens, the disabled, others on fixed incomes and low and middle income families."
No organized opposition — yet
One of the reasons why Charton can remain confident about Amendment 4’s chances of passing is that thus far, there’s no organized opposition. And traditionally, ballot measures without opposition tend to pass without much trouble.
Retired financier Rex Sinquefield is a potential adversary, especially because he’s advocated for replacing Missouri’s income tax with an expanded sales tax. An e-mail to one of Sinquefield advisors wasn’t returned about whether he’d actively oppose Amendment 4.
Missouri Municipal League deputy director Richard Sheets said his group will be meeting this weekend and could take a stand on the measure. Because there isn’t a widespread push to expand sales taxes to services, he said it might not have much of an impact on local governments.
“We talked about this a few months ago when this was first initiated. At that time, we did not take a position,” Sheets said. “There’s really no effort underway to expand our sales tax into services, so it’s something that really hasn’t been on our radar. We’ve been in discussion with the Realtors Association, who are backing this. And many of the things they’re doing, we certainly agree with.
“I’m not sure what our board is going to do,” he added. “We may just be neutral on this.”
Whether Amendment 4 attracts substantial opposition or not remains to be seen. But Charton said a “robust” advertising campaign will support Amendment 4. And Charton said he expects supportive trade groups to help with Amendment 4’s campaign. That could include realtors putting up yard signs or professional associations alerting their members.
“You know, a sales tax on service is a cradle-to-grave tax, because you would pay a tax on the service of the doctor to deliver the baby and you would pay a tax on the service of the fella that carves the headstone for the funeral,” Charton said. Word about the amendment "will spread person-to-person, in addition to a very extensive advertising campaign. And that’s why we’re confident this is going to grow in popularity and voters are going to vote yes on Amendment 4, the Taxpayer Protection Amendment.”
Follow Jason Rosenbaum on Twitter @jrosenbaum