Bill to raise taxes on manufacturing, mining, producing and processing products receives hearing

By Ray McCarty

May 5, 2026 - After not receiving a hearing all session, HB 2243 (Rep. Wolfin) that would increase the sales tax on business inputs, received a hearing today in the House Rules - Legislative Committee. The bill would raise taxes on Missouri manufacturing companies, mining operations, and other companies processing or producing goods and taxable services.

Associated Industries of Missouri was the only statewide business advocate to testify against the bill.

I explained to the committee the history of the current sales tax exemption and the need for uniform state and local sales tax bases to meet criteria used by the U.S. Supreme Court to approve states' imposition of sales/use taxes on sales made by companies located outside the states' borders.

Last year, AIM successfully defeated an attempt by a few local government officials and their State Representative to eliminate this local sales tax exemption for manufacturing inputs under section 144.054. Here are some of the reasons we oppose HB 2243:

• First and foremost, this bill would instantly increase taxes on companies that manufacture, mine, produce or compound products or taxable services by $35 million per year, according to the fiscal note; and,

• Second, we enacted the local sales and use tax exemption to make Missouri's tax system simpler in compliance with the Wayfair v. South Dakota decision of the U.S. Supreme Court. That case allowed state and local governments to enforce collection and remittance of Missouri's state and local sales and use taxes on internet sales by out-of-state retailers that have no physical locations in Missouri. If this bill becomes law and Missouri's ability to collect such taxes is challenged by any out-of-state retailer that has no physical locations in Missouri and the tax system is found to be unconstitutional, Missouri cities and counties stand to lose up to $540 million in local use taxes per year ($369 million loss for cities and $171 million loss for counties, according to the Missouri Department of Revenue Annual Report FY 25). The state would also lose a significant amount of tax revenue in that scenario.

We thank the 14 members of the AIM Tax Committee that also filed written testimony opposing this bill. If your company does not have a representative on the AIM Tax Committee and you would like to participate, please send an email to me at rmccarty@aimo.com. Many staff accountants, tax lawyers, and CFO's participate in the Committee. No additional cost and no real time commitment from members as we operate generally through an email chain.

Despite our opposition, the bill has been scheduled for a vote on Thursday, May 7. AIM will continue to work with House leadership to prevent this language from passing in this or any other bill. We will report the results in a future post.