A proposed state and local sales tax exemption on groceries is drawing strong opposition from local officials in Jefferson County and beyond.
The tax exemption, known as Senate Bill 1239, is designed to help the working poor, said Sen. Mary Elizabeth Coleman, R-Arnold, the bill’s sponsor.
“We are really making it very difficult in particular for our neighbors who are the working poor, meaning they’re not relying on SNAP or WIC to buy groceries, they’re working and trying to buy them, and they’re paying a higher rate for necessary items,” she said. “I just think it makes sense we don’t fund essential services on the backs of the poor.”
According to the bill, the 1 percent state sales taxes and local taxes on retail sales of food would be phased out in equal increments every year for four years beginning in 2027 and fully eliminated by 2031.
The Senate Economic Workforce Development Committee held a hearing on the bill Feb. 11, hearing testimony from individuals for and against the bill. No vote was taken.
Local officials said the elimination of sales taxes on food would not significantly lower overall food prices for low-income households or meaningfully address food insecurity.
Coleman said she has filed the grocery tax exemption in the state legislature every year since 2019, when she was first sworn in as a state representative for the 97th District.
“When I was reading (the Missouri Constitution), I saw that there is a provision on necessities, and when I looked at the exemptions then that have been carved out for literally dozens of different items from the sales tax and yet grocery items were not one of them, that was really baffling to me,” she said. “I think this isn’t a partisan problem. I think this a math problem. I think anybody who would look at the way Missouri and our communities are funding our essential services; nobody would build the model we have right now.”
A similar bill, introduced by Sen. Patty Lewis, a Democrat from Kansas City, would only eliminate the state’s portion of sales taxes on groceries.
Local response
Arnold Mayor Bill Moritz said in a Feb. 7 letter addressed to Sen. Ben Brown, the chair of the Economic Workforce Development Committee, that the tax exemption would have a “catastrophic impact” on the city and its residents.
Moritz said the city of Arnold would lose approximately $5.24 million annually if the tax revenue is taken away.
The sales tax on groceries in Arnold ranges from 9.6 percent to 11.6 percent, depending upon the location of the store in local taxing districts.
“Such a substantial loss of revenue would leave us no other choice than to conduct mass layoffs, many of which would include law enforcement officers, and would result in a significant reduction of critical services provided to city of Arnold residents,” Moritz said in the letter.
Officials from Crystal City sent a Feb. 5 letter to Coleman, expressing their concerns about the proposed sales tax exemption.
In that letter, they said the exemption would cost the city $500,000 in lost revenue and more than $1 billion across the state. Crystal City levies a 10.1 percent sales tax on groceries in CIDs such as the Twin City Mall and Crystal City Center. Outside of those districts, the city levies a 9.1 percent sales tax.
David Klarich, an attorney from Rizeman Berger P.C., testified against the bill on behalf of the city of Eureka at the Feb. 11 committee hearing. Klarich said the city, a tourist destination, would stand to lose $1 million from sales tax revenue.
In response to these concerns, Coleman said she finds the opposition interesting because it predates the Wayfair tax that went into effect in Missouri in 2023.
“They are able to go to the voters and say, ‘Can we increase the sales tax on non-grocery items at a level that would just offset what we’ve lost on grocery purchases?’” she said. “There’s ways to build a system that funds essential services and at the same time doesn’t disproportionately affect our working poor.”
Coleman said she has always had bipartisan support on the grocery tax exemption.
She also said Gov. Mike Kehoe is taking a bigger look at the Missouri taxing structure.
“We have personal property taxes, we have property taxes, we have income taxes, we have sales taxes, we have TIF (Tax Increment Financing) and CIDs, we have a number of a different types of taxes, and it is difficult when you just pull at the thread of one of those,” Coleman said. “Looking as a whole about how we are funding essential services in the state of Missouri and at our local level, it’s time to take a comprehensive look at this.”