Gov. Nixon visits Nodaway County Senior Center to discuss his veto of a $200 million sales tax increase on Missourians who need prescription drugs

Gov. Nixon visits Nodaway County Senior Center to discuss his veto of a $200 million sales tax increase on Missourians who need prescription drugs

MARYVILLE, Mo. - Gov. Jay Nixon today visited the Nodaway County 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.

While speaking at the Nodaway County Senior Center, 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.

"The tax increase on prescription drugs in House Bill 253 would hit older Missourians on fixed incomes especially hard," Gov. Nixon said. "The out-of-pocket costs for prescription drugs already put a strain on many Missourians' budgets - and House Bill 253 would make prescription medication even more expensive. Now is not the time to reach further into the pockets of Missouri families and seniors and make it harder for them to make ends meet."

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 attempt an override 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, we've held the line on taxes and kept Missouri a low-tax state. I intend to keep it that way," Gov. Nixon said. "This legislation is a tax hike that folks, especially older Missourians, don't deserve and can't afford."

Read Gov. Nixon's full veto message of House Bill 253 here.