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Gov. Nixon Vetoes Tax Breaks

David A. Lieb / Associated Press
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Photo: UPI/Bill Greenblatt

Photo: UPI/Bill Greenblatt

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JEFFERSON CITY, Mo. (AP) - Missouri Gov. Jay Nixon vetoed a package of special tax breaks Wednesday for power companies, restaurants, computer data centers and other industries, calling them a “grab bag of special interest give-a-ways” that would bust a multi-million-dollar hole in the state budget.

The vetoes by the Democratic governor could set up another showdown with the Republican-led Legislature, which already has successfully overridden Nixon’s veto of a separate general income tax cut.

Any attempt at additional veto overrides would come during a September session and require a two-thirds majority from both chambers. In addition to overriding Nixon’s veto earlier this year on the income tax cut, Missouri lawmakers overrode 10 Nixon vetoes last year.

Nixon said he would be making significant budget cuts in the coming weeks to guard against the possibility that the Legislature would again override his veto.

The newly vetoed bills include several passed in May during the Legislature’s final day of its regular session that would exempt various categories of businesses from paying sales taxes on the equipment or electricity they use. One bill would grant those tax breaks to computer data centers, which store or process electronic information. Business groups have pursued incentives for data for years while arguing that Missouri is missing out on some high-tech businesses.

A similar measure would allow power companies to purchases electrical lines, poles and transformers tax-free. And restaurants, bakeries and grocery stores would pay no sales tax on the electricity used to process food that they sell.

Other provisions would grant sales tax exemptions for fitness centers, commercial laundries and people who buy old vehicles.

Nixon has estimated that the various tax law changes could reduce state revenues by $425 million annually and local revenues by an additional $351 million.

Republican legislative leaders have disputed those figures. They have defended some of the tax breaks, such as the ones for fitness centers and restaurants, as mere clarifications of policies that they contend have been incorrectly applied by the Department of Revenue. They contend others, such as data center tax break, are long overdue incentives to keep Missouri economically competitive.

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