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HANNIBAL – Gov. Jay Nixon today visited a local pharmacy in Hannibal 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 last month.
While speaking at Grand Pharmacy, which has been serving the residents of Hannibal since 1985, the Governor 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.
“If this bill became law, Missourians would pay a new tax of up to 10 percent in some communities on prescription drugs, including insulin injections, asthma inhalers, and blood pressure medication,” Gov. Nixon said. “Putting additional barriers between Missourians and the lifesaving medications they need is unacceptable and quite frankly, dangerous.”
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 and nearly 9 percent in Hannibal.
The Governor vetoed House Bill 253 earlier this summer, but members of the Missouri General Assembly have expressed their intent to attempt an override at the annual veto session this September.
“Supporters of this bill still argue that it should become law and have pledged to try to override my veto this fall,” Gov. Nixon said. “There is no excuse to vote a second time to raise taxes on seniors, cancer patients and others who depend on prescription medication to stay healthy.”
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.
“Missouri is a low tax state, and we’re going to keep it that way. Today, Missouri’s economy is growing, businesses are hiring, and folks are getting back to work. But fiscal responsibility is just as important when times are good as it is when times are tough,” Gov. Nixon said. “Unfortunately, the legislature finds it harder to abide by this principle. House Bill 253 is a tax increase that Missourians don’t deserve and cannot afford.”