Gov. Jay Nixon today visited the Warrensburg Senior Center to discuss House Bill 253, which would eliminate the current sales tax exemption on prescription drugs and result in an estimated tax increase of $200 million annually. The Governor vetoed House Bill 253 in June.
Speaking to a group of local seniors, health providers and civic leaders, Gov. Nixon said the $200 million tax increase in House Bill 253 would make it harder for families to afford the medications they need to manage chronic conditions or treat an illness.
"House Bill 253 is a $200 million a year tax hike on prescription medication that will hit vulnerable Missourians the hardest," Gov. Nixon said. "Many of the lawmakers who voted for this bill must not have had the opportunity to read or fully understand all its negative consequences. But now that the House Bill 253 tax hike has been discovered, there is no excuse for voting a second time to raise taxes on Missouri families and seniors by $200 million a year."
"The cost of prescription medication is already a concern for Missouri families, and the potential for these costs to go up through a tax increase is especially troubling," said Melissa Gower, County Services Director for Care Connection Aging Services at the Warrensburg Senior Center. "Raising taxes on prescription medication would place an incredible strain on the older Missourians we serve, many of whom already find it difficult to afford the medicine they need to stay healthy."
Since 1979, Missouri law has exempted prescription drug costs and co-pays from state sales tax. Language in Section 144.030 of House Bill 253 would repeal this exemption, resulting in an estimated $200 million tax increase on Missourians who take prescription medication. Because local jurisdictions follow state laws regarding exemptions, House Bill 253 would make prescription drugs subject to local sales taxes as well, resulting in a new tax of up to 10 percent in some communities.
The Governor vetoed House Bill 253 earlier this summer, but some members of the Missouri General Assembly have expressed their intent to override the veto at the annual veto session this September.
Last month, AARP Missouri applauded Gov. Nixon's veto of House Bill 253 and urged the legislature to sustain it. "Preventing the taxation of prescription drugs, as instituted by this bill, is critical to AARP Missouri's 750,000 members," said AARP Advocacy Director Norma Collins. "This tax increase would be endured disproportionately by seniors, many suffering from cancer, heart disease and other life-threatening illnesses. Prescription drugs costs can exceed thousands of dollars per month-adding taxes to that number is especially burdensome for those living on fixed incomes."
In a September 2011 report, the State Auditor recognized that Missouri has the seventh-lowest state taxes as a percentage of personal income. In 2012, the Federation of Tax Administrators ranked Missouri the fifth-lowest in per capita state taxes in the country, representing a lower tax burden than all of our surrounding states. Moreover, a 2012 report by Ernst & Young and the Council on State Taxation ranked Missouri's effective business tax rate as the eighth-lowest in the country.
"Over the past five years, I've advocated for and signed targeted tax cuts that have helped to create jobs and grow the economy. As a result, Missouri has been recognized time and time again as a low-tax state. I intend to keep it that way," Gov. Nixon said. "But House Bill 253 is a tax increase that folks don't deserve and can't afford. I strongly urge the General Assembly to think twice about voting again to raise taxes on seniors and families."