Corrected Sept. 15 at 10:45 a.m.
As other bills inspired clamorous debate Wednesday during the Missouri Legislature’s annual veto session, two of the state’s most prominent business lobbies welcomed the relatively quiet passage of two bills they had identified as important.
Before lawmakers convened in Jefferson City, representatives of both Associated Industries of Missouri and the Missouri Chamber of Commerce and Industry highlighted the same five bills that they viewed as either priority legislation or bills to follow. Of those, two were voted into law: SB 1025, which creates tax breaks for businesses that offer instructional classes like yoga and dance, and HB 2030, which introduces a tax deduction for profit gained when business owners sell companies to their employees.
Those were two of 13 total vetoes reversed Wednesday as the Republican-controlled House and Senate added to the record number of overrides accumulated by Democratic Gov. Jay Nixon during his eight years in office.
The most contentious of the 13 bills were SB 656, which reduces restrictions for carrying a concealed gun, and HB 1631, which requires Missourians to present a government-issued ID before voting. Voters still need to approve an amendment in November to make the voter ID bill a law.
Here’s a closer look at some of the bills that business interests in the state were backing during Wednesday’s veto session:
SB 1025 – Instructional class tax
Result: Veto overridden (passed the Senate, 29-2; passed the House, 124-31)
The instructional classes sales tax will exempt instructional classes from sales tax and a 4 percent tax paid to or in places of recreation.
Nixon said in his veto memo that he opposed the measure because it “would further erode the tax code without requiring the creation of even a single job.” The governor said it will reduce state revenue by $8 million in 2017.
Ray McCarty, the president and CEO of AIM, disagreed. He said before the veto session Wednesday that SB 1025 addressed a “longstanding problem that’s happened between the Department of Revenue and taxpayers.”
Tracy King, vice president of government affairs for the Missouri Chamber, said it was never the intent of the legislature to make instructional classes taxable. “We have small businesses right now that are going out of business because they’re being forced to pay the taxes on those instructional classes because they didn’t collect it over the last couple of years,” she said. “So this is very important to clarify that those things should not be taxable. Your children’s dance classes should not be taxable. They’re not entertainment and amusement under Missouri statute.”
HB 2030 – Employee stock ownership plan
Result: Veto overridden (passed the Senate, 24-6; passed the House, 119-38)
The employee stock ownership bill will allow business owners to defer up to 50 percent of the taxes made from the sale of stock to give it to employee stock ownership plans — as long as the employees of the company own at least 30 percent of the business.
Nixon has called the measure a “special-interest tax break” and warned it could mean a $10.3 million hit to state revenue.
Dan Mehan, president and CEO of the Missouri Chamber, said in a release after the veto was overridden that the bill will make employee ownership more viable. “Having more owners selling to their employees will help keep Missouri businesses locally-held and growing in our state,” he said. “The Missouri Chamber strongly supported this effort and I’d like to thank Rep. Hoskins and our state lawmakers for finally pushing this bill across the finish line.”
HB 1870 – “Big Government Get Off My Back”
Result: Override failed (passed the House, 113-43; fell short in the Senate, 18-12)
The measure proposed the extension of an existing bill that offered, among other things, tax deductions for small businesses that create jobs.
The Missouri Chamber’s King said the bill was potentially beneficial.”That’s where the jobs are going to be created,” she said. “To ensure that they get that incentive still and the moratorium on increase of in-season has to be very important to keep our small businesses to where they can create jobs.”
The sticking point, Nixon said, was that the bill eliminated certain screening requirements for employees at some small businesses, and that “would make it easier for businesses that hire illegal workers to obtain government contracts or tax credits.”
SB 591 and SB 847
AIM’s McCarty depicted both bills as pitting attorneys against businesses: SB 591 would have established more stringent standards for expert witnesses in trials, and SB 847 would have limited the amount of damages that could be collected in certain trials.
“Both of those bills were very important to Associated Industries and really to business in general,” McCarty said.
However, neither was taken up for an override effort.
Michael Stacy contributed to this report.
Correction: Sept. 15 at 10:45 a.m.
The second paragraph was updated to reflect the correct numbers of the two bills in question. A previous version of the story incorrectly identified the bill numbers.