SB 981 Modifies various provisions of law regarding sales taxes
Sponsor: Callahan
LR Number: 5191S.01T Fiscal Note: 5191-01T.ORG
Committee: Jobs, Economic Development and Local Government
Last Action: 7/12/2010 - Signed by Governor Journal Page: S1965
Title: Calendar Position:
Effective Date: Varies
House Handler: Sutherland

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Current Bill Summary


HCS/SB 981 - This act allows the governing body of Kansas City to seek voter approval to impose a one-eighth, one-fourth, one-half, or three-fourths percent sales tax to provide revenues for public safety activities including operations and capital improvements, which may be funded by the issuance of bonds.

Under current law the general city sales tax law allows cities to 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. This act specifies that the combined rate of sales taxes adopted under the city sales tax law cannot exceed 2%.

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, RSMo. This act provides that the combined rate of sales taxes adopted under the capital improvement city sales tax law cannot exceed 1%.

The changes to the general city sales tax and capital improvements city sales tax law are 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.

The act provides that in general, sales for resale will not be subject to sales tax provided such subsequent sale is taxed in this or another state, for resale, or exempt from tax. Two exceptions to the general rule are created for charges for admission or seating accommodations at places of amusement, entertainment, or recreation, and for charges for rooms, meals, and drinks. In the case of the two exceptions, operators of such places must remit tax on the gross receipts received by such operators, and subsequent sales will not be subject to tax if they are an arms length transaction for fair market value with an unaffiliated entity.

The act creates a state and local sales and use tax exemption for sales of utilities by sports complex authorities at such authority's cost that are consumed in connection with the operation of a sports complex leased to a professional sports team.

Mandatory and voluntary gratuities provided in conjunction with the receipt of property or services are exempted from local sales and use tax regardless of whether such property or service is subject to sales or use tax.

Local taxes imposed upon transient accommodations will only apply to amounts actually received by operators of places in which rooms are furnished to the public (such as hotels, motels and inns etc.) This provision will not apply if the purchaser is an entity which is exempt from tax.

The act contains an emergency clause for the provisions: authorizing the City of Kansas City to seek voter approval for a public safety sales tax; modifying provisions of the capital improvements city sales tax law; regarding sales for resale; exempting sales of utilities by sports complex authorities from state and local sales tax; exempting gratuities from local sales and use tax; and regarding local taxes on transient accommodations.

JASON ZAMKUS