GOVERNOR URGES BILL TO EASE USE TAX BURDEN ON CONSUMERS

JEFFERSON CITY -- A consumer use tax, which caught most Missourians by surprise when a form to pay it appeared in the state's 1993 individual income tax booklet, should be limited to only people making large purchases, Gov. Mel Carnahan said this week.

"Collecting this tax from consumers is bad government. I don't like requiring Missourians to file consumer use-tax returns because it places too much of a burden on consumers," said Carnahan. "Attempting the collect the use tax from individuals is over-intrusive and not enforceable."

Cape Girardeau County's state legislators -- Sen. Peter Kinder and Reps. Mary Kasten and David Schwab -- all say they will support legislation to limit the use tax payment requirement.

Carnahan is proposing legislation, sponsored by Rep. Karen McCarthy, D-Kansas City, that will exempt most consumers and businesses that buy less than $5,000 per year in goods from out of state mail order vendors from having to file a use tax return.

Kinder said he has co-sponsored a bill to set an exemption at $1,000, but would be willing to go as high as $5,000. "I am sympathetic to any notion like that, including outright repeal," said Kinder. "I certainly agree someone who buys a few hundred dollars from a catalog should not have to file a return."

The consumer's use tax is a tax imposed on goods purchased from out of state sellers who are not registered with the state of Missouri to collect the tax. Use taxes are designed to protect in-state businesses who are required to collect sales taxes.

The state can compel businesses to charge sales tax in Missouri if they are located in Missouri or have a "business presence" such as having salesmen working in the state.

Missouri has had a use tax since 1959, but the Department of Revenue has had only limited success trying to get out of state mail order vendors to collect the tax and remit it to the state. But in 1992, the U.S. Supreme Court ruled that most mail order houses could not be forced to collect the tax.

In late 1992, the Department of Revenue decided to try to collect the use tax from consumers and forms were included in tax booklets this year. Filing for 1993 was optional, but next year it was intended to become mandatory. The tax would have even applied to magazine subscriptions.

Kasten and Schwab said the attempt to collect the individual use tax this year was inappropriate, because people had no warning about it and the need to keep records of such transactions.

"Changing this seems like a practical approach to me," said Schwab. "I am against coming up and requiring everyone to submit, when they had no warning to keep records."

Added Kasten: "No one was prepared to do it. The governor's bill is sound and reasonable."

Kasten, who has co-sponsored the legislation, said it would not be practical for the department to try and collect what amounts to only a few dollars for most people. "I can see it as a nightmare, quite a paper problem, and difficult to enforce," she said.

"Right now, we really have something that is a nuisance to the people," added Kinder.

Carnahan said the whole plan by the Department of Revenue to collect the tax was "a bad idea. Part of my job is to protect consumers from overly intrusive and clumsy laws like this."