HB 1456 was a milestone 17 years in the making: the obtaining of (mostly) a statewide funding mechanism to upgrade 911 emergency dispatch systems especially where 911 does not exist in Missouri. However, like with most new and complex legislation, the law of unforeseen consequences comes into play and inevitably there have to be important “fixes” in order to best implement the new law. Hence SB 291 came to the rescue.
1. The General Assembly attempted to avoid double taxation on prepaid cell phones and their plans by having opt in counties for the 3% fee on prepaid cell phones and plans not being permitted to assess a 190.335 RSMo tax on such items. Warren County 911’s sales tax is in a special provision, section 190.392 RSMo, and was not mentioned in the original legislation. Did this oversight get fixed?
Yes, now Warren County’s 911 tax will also not result in any double taxation on prepaid cell phones and plans as well. 190.325.13 RSMo & 190.335.14 RSMo (this prohibition against double taxation on prepaid cell phone and plans for 190.335 RSMo funded 911 Centers was already the law per HB 1456 passed last year, but had to be clarified for the Department of Revenue, see discussion below).
2. A member of the Senate concluded that Jefferson County 911 had an excessive sales tax rate. Did this issue get addressed?
Yes, Jefferson County 911 sales tax rate got reduced from one-half cent to 1/4th cent. In the interim however the 911 Center got the voters to approve a one- half cent sales tax. It is uncertain whether the Department of Revenue will collect the tax at the voter approved rate or the SB 291 rate. SB 291 has an emergency clause making it effective on the date signed by the Governor or when the Governor’s pocket signature becomes effective. (We all know what a pocket veto is. Missouri has a pocket signature procedure whereby if the Governor does nothing with a piece of legislation within 45 days of the close of a session, the legislation becomes law [Article III s 31 of the Missouri Constitution).
Litigation is possible over this section on the issue of applicability of the prohibition against special laws and multiple subjects being a violation of Article III s 23 of the Missouri Constitution and cases like Hammerschmicdt v. Boone County, 877 S.W.2d 98 (Mo banc 1994) at its progeny. 190.327.5 RSMo
3. Again in the special case of Jefferson County 911 what is the best argument that SB 291 will prevail over the vote of the people?
Section 190.335.13 RSMo says if there has been an automatically reduced cap via SB 291, the that County is prohibited from submitting to the voters a new higher rate. 190.335.13 RSMo
4. Again in the special case of Jefferson County 911 what is the best argument that the vote of the people will prevail over the SB 291 the tax rate cap for Jefferson County 911?
In addition to the Special Law prohibition discussed supra, the People are the Supreme Law of the Land and that sentiment is even in the State’s motto. Accordingly, Article I s 1 of the Missouri Constitution provides the following:
“Section 1. Source of political power-origin, basis and aim of government- That all political power is vested in and derived from the people; that all government of right originates from the people, is founded upon their will only, and instituted for the good of the whole.”
5. On the local device enabling tax option (190.455. RSMo) to be voted in by the people is there any sunset provision on this local option?
No, except in Jackson County and where the deadline is the General November election in 2020. 190.455.3 RSMo.
6. On some of the shorter more limited prepaid cell phone plans it is administratively cumbersome and inefficient to administer the 3% fee (tax) on small purchases. Did this issue get addressed?
Yes, any such purchase under fifteen $15.00 dollars retail is exempted from the 190.460 RSMo retail service charge. 190.460.2(1) & (2)(b) RSMo.
7. Retailer expressed a concern that sometimes the prepaid cell phone plans and devices are not itemized and that it would be administratively cumbersome to separate out the items subject to the 3% service charge unless the retailer’s software system produces an itemized bill. Did the retailers’ concerns get addressed?
Yes, if the retailer’s system does not produce a sufficiently itemized bill, the 3% may be assessed across the board, or in the alternative if the retailer’s system produces a sufficiently itemized bill, the 3% service charge is assessed accordingly. 190.460.2(2) (a) & (b) RSMo.
8. In regard to setting up the 3% service charge on prepaid cell phones and plans, HB145 left the responsibility of informing and educating retailers to the 911 Boards and the 911 Boards felt woefully inadequate to accomplish this task. Did this problem get resolved?
Yes, the Department of Revenue now is required to perform all functions incident to the administration, collection, enforcement and operation of the 3% service charge. 190.460.3(1) RSMo.
9. A concern was expressed by the 911 Centers about the remitting of the 3% funds back through the County Commissions instead of directly back to the 911 centers? Evidently the concern was that the County Commissions might charge an administrative fee or even siphon off some of the funds for other purposes. Did this concern get addressed?
Yes, the 3% funds come back directly to the 911 centers. Exception: In Jefferson County these funds are mandated to go to the County Commission and can be used for something called “public safety infrastructure”. 190.460.3(5) RSMo.
10. HB 1456 locked in the minimum rates of returns of the 3% service charge funds initially for three years. While providing a measure of some predictability, nonetheless a concern was expressed that this three-year lock in period was administratively inflexible, especially during the first years of the operation of the program when flexibility might be most needed. Did this concern get addressed?
Yes, the first three years provides for annual adjustments by the Missouri 911Service Board and THEN locks into three-year increments, thereby providing both flexibility in the early years and predictability thereafter. 190.460.3(5) RSMo.
11. HB 1456 had a mandatory sunset on the 3% prepaid cell phones and plans service charge of January 01, 2023 thereby making long term planning impossible. Did this sunset provision get eliminated?
Yes, so long-term planning by both local 911 boards and the Missouri 911 Service Board is now possible. 190.460.7 RSMo.
12. In response to DOR’s erroneous e-mail that the 3% service charge would wipe out local 911 sales taxes for 911 Centers (Chapter 67 RSMo funded 911 Centers not affected), on not only prepaid cell phones and plans but ALL items subject to their sales tax, a number of localities panicked and opted out of the program. Can these counties and municipalities opt back into the 3% service charge program?
Yes, but there is a very tight time frame. The governing body must make a two-thirds vote available to the DOR no later than November 15, 2019, for implementation of the 3% service charge January 1, 2020. It does not appear that a locality can opt back into the program after these deadlines. 190.460.7 RSMo.
13. No less than two law suits were filed asking for a declaratory judgment that the DOR e-mail was erroneous and rather that the prohibition against double taxation and the 3% service charge applied ONLY to the prepaid cell phones and plans and not to all items subject to 911 sales taxation. In response to the confusion some retailers imposed the 3% service charge and some did not. Are either sets of retailers facing any liability or obligations for refunds especially for 2019?
No. If a Court upheld the DOR’s position that sales taxes on All items were eliminated by HB 1456 for opt in counties, no retailer would have owed any refunds for the period from January 01, 2019 and until the effective date of SB 291. 190.462.2 RSMo
If a Court had invalidated DOR’s position, then no retailer would be liable for failure to having collected the 3% service charge. 190.462.3 RSMo
Post the effective date of SB 291 (whenever the Governor signs or the pocket signature becomes effective) the law suits become moot because the issue of whether the elimination of double taxation applies ONLY to prepaid cell phones and plans is definitively determined per 190.335.14 RSMo…including even Warren County.
14. HB 1456 was unclear whether the Missouri 911 Service Board would have its own budget and record keeping or would just be an adjunct agency within the Department of Public Safety/? Did this ambiguity get clarified?
Yes, the Missouri 911 Service Board now has its own budget, control of revenues and expenses and control of its reporting functions. The 3% service charge revenue cannot get siphoned off by the Department of Public Safety for other purposes and will be used only for upgrading emergency telecommunications in Missouri. 650.330.5(23) RSMo
15. HB 1456 left considerable regulatory authority with the Missouri 911 Service Board, but only in the area of 911 training. Did this authority get expanded to include implementation of the 911 Legislation?
Yes, the Missouri 911 Services Board on its own initiative can now promulgate regulations relating not only to 911 dispatch training but now also on all aspects of the new 911 legislation including such crucial issue as to what constitutes consolidation for those areas of the state whose voters that have adopted the device tax (190.455 RSMo), the guidelines of or the 3% service charge funds and respective grant programs and clarification of what constitutes appropriate consolidation procedures in general. 650.330.6 RSMo.
This latter development of regulatory authority for the State Board is revolutionary in its commitment to efficiency and effectiveness. Unlike a merely advisory body, the Board’s ideas or proposals will not die the usual death from time lapses of and attrition as the concepts wind there way up an interminable bureaucracy. The Board of course will seek input from the Department of Public Safety and other State agencies for their expertise and perspective. However, once it comes time to implement a finished product the Board is authorized to file regulations directly with the Secretary of State’s Office Administrative Rules Division and the Joint Committee on Administrative Rules.