Missouri laundry tax break up for potential veto override

In this Wednesday, Sept. 9, 2015, photo, workers from left, Jalisa Gleghorn, Lorissa Coleman and Manuela Sierra prepare freshly laundered sheets to be pressed at Faultless Healthcare Linen in St. Louis. Missouri lawmakers next week will try to overturn Democratic Gov. Jay Nixon's veto of a bill that would waive taxes on soap and other materials used in large-scale laundries. (AP Photo/Jeff Roberson)

JEFFERSON CITY, Mo. (AP) — A Missouri state senator says he plans to push lawmakers next week to overturn Democratic Gov. Jay Nixon’s veto of a tax break for large-scale laundries.

The bill would waive sales taxes on detergent and other materials used to clean linens for businesses that handle at least 500 pounds of clothes per hour and 60,000 pounds per week, mostly for hotels, hospitals and the food industry. Prompted by industry complaints that the facilities now are unfairly taxed, the measure passed overwhelmingly this spring in the Republican-led House and Senate.

In this Wednesday, Sept. 9, 2015, photo, a worker handles laundry at Faultless Healthcare Linen in St. Louis. Missouri lawmakers next week will try to overturn Democratic Gov. Jay Nixon's veto of a bill that would waive taxes on soap and other materials used in large-scale laundries. (AP Photo/Jeff Roberson)
In this Wednesday, Sept. 9, 2015, photo, a worker handles laundry at Faultless Healthcare Linen in St. Louis. Missouri lawmakers next week will try to overturn Democratic Gov. Jay Nixon’s veto of a bill that would waive taxes on soap and other materials used in large-scale laundries. (AP Photo/Jeff Roberson)

Lawmakers will convene Wednesday for a session to review vetoed bills. That’s when bill sponsor Sen. Will Kraus, a Lee’s Summit Republican who is running for secretary of state in 2016, said he plans to ask lawmakers to enact the legislation through a two-thirds majority vote that would override Nixon’s veto.

Commercial laundries raised concerns after the state Supreme Court in 2014 denied a “processing” tax break for a laundry. Kraus said the Department of Revenue now can collect taxes both on the materials that laundries use to wash linens and on the final cleaned product.

“I don’t believe that was ever intended,” said Kraus, who called it “double taxation.”

In this Wednesday, Sept. 9, 2015, photo, Greg Curry sorts freshly laundered medical scrubs at Faultless Healthcare Linen in St. Louis. Missouri lawmakers next week will try to overturn Democratic Gov. Jay Nixon's veto of a bill that would waive taxes on soap and other materials used in large-scale laundries. (AP Photo/Jeff Roberson)
In this Wednesday, Sept. 9, 2015, photo, Greg Curry sorts freshly laundered medical scrubs at Faultless Healthcare Linen in St. Louis. Missouri lawmakers next week will try to overturn Democratic Gov. Jay Nixon’s veto of a bill that would waive taxes on soap and other materials used in large-scale laundries. (AP Photo/Jeff Roberson)

Nixon blasted the roughly $3.4 million reduction in state and local funds projected by legislative researchers for this fiscal year if the tax exemption is enacted, and the more than $4 million in the following fiscal years. He said the legislation was an unfair expansion of existing sales tax breaks for manufacturers.

“The commercial laundries might be getting their detergent tax-free, but the rest of Missouri taxpayers would be getting taken to the cleaners,” Nixon wrote in a veto letter of the bill, citing about 50 facilities that would benefit.

Mark Spence, chief operating officer for Faultless Healthcare Linen, said neighboring states such as Kansas, where materials such as soaps and solvents for laundries are not taxed, are more business-friendly. Faultless has a facility in Kansas, as well as several in Missouri and Illinois.

Spence said the current tax policy might push commercial laundries to expand in other states, calling it “a pretty significant advantage from a business standpoint.”

The veto has a good chance of being overturned, as the bill fell five votes short of the needed two-thirds majority in the House in May, though more than a dozen lawmakers were absent. It passed 31-3 in the Senate in April, well over the 23 needed for an override.

 

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

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