SB 768, sponsored by Sen. Denny Hoskins, became a vehicle for a fix of a court decision that took a lot of hard work over two full years. Rep. T.J. Berry handled the bill in the House and added the key provisions to the bill. Sen. Mike Cierpiot filed an early bill and also helped greatly in the passage of this legislation.
The language added to the bill ensures a sales/use tax exemption for the purchase of equipment and other goods and services used in the production of telecommunications services will continue in Missouri.
An April 2016 decision of the Missouri Supreme Court mentioned taxpayers may not be able to rely on the exemption, but the legislature has now clarified the exemption has existed and will continue to exist, and that the production of telecommunications services will be treated as manufacturing. The Missouri Supreme Court in previous decisions over many years had opined telecommunications and some data processing services were indeed manufacturing, but the 2016 decision left taxpayers wondering whether such decisions would continue to be followed by the Court.
“The Missouri Supreme Court had confused taxpayers, particularly in the telecommunications and data processing fields, by issuing the 2016 decision after holding through many previous decisions over more than a decade that such activities were manufacturing,” said Ray McCarty, president of Associated Industries of Missouri. “I am very proud of the hard work of members of the AIM Tax Committee who diligently sought resolution of this situation since the errant decision was rendered and am very happy that we have finally passed this important legislation. We thank Sen. Hoskins and Rep. T. J. Berry for their hard work in ensuring these industries can continue to operate as they have for many years,” said McCarty.