Rep. Fowler proposes allowing state to withhold county sales tax over State Tax Commission noncompliance

Representative Ron Fowler introduced House Bill 999 to the Special Committee on Tax Reform on Oct. 12, 2025, proposing that the state be allowed to withhold a county’s portion of sales tax revenue when a county fails to comply with orders from the State Tax Commission.

The bill, Fowler said, “is a response to the real and ongoing challenges Missourians face,” and would “hold counties accountable to following State Tax Commission orders” by withholding sales tax revenue “proportional to the extent of the noncompliance.”

Why it matters: proponents framed the measure as a remedy to protect taxpayers who have faced delayed corrections to overassessments. Jackson County was cited repeatedly as the motivating example: witnesses and members described a backlog of appeals that, they said, left homeowners exposed to higher mortgage payments, possible foreclosure and an uphill path to redress.

Jackson County Legislator Sean Smith told the committee that many homeowners still await appeals and that an order from the State Tax Commission to limit increases to 15% had not been implemented quickly. “The timeliness of the ability to remedy an erroneous assessment is so key,” Smith said, adding that delays had already put some homeowners “in unrecoverable situations.” He and others estimated the scale of the Jackson County problem in the low hundreds of millions of dollars for the years discussed and said a monthly withholding of $40 million in sales tax would be a strong enforcement tool.

Committee members raised several specific questions about how the bill would work in practice. The bill text discussed withholding the county’s portion of sales tax only, not municipal or special-district portions; Fowler confirmed the intent was to withhold the county share, and that the withholding would be proportional to the disputed amount. The bill also creates a baseline 90-day period for counties to cure noncompliance before withholding begins; some members said 90 days seemed long and discussed setting a shorter maximum.

Opponents warned of unintended consequences and asked whether the State Tax Commission has the authority or the resources called for in the bill. Andy Arnold, testifying for the Missouri State Assessors Association, said the State Tax Commission “by law deals with real estate and personal property. [It] doesn’t deal with sales taxes,” and cautioned that giving the commission new withholding authority “is overkill.” Steve Hobbs, executive director of the Missouri Association of Counties, asked for more resources and clearer guidance rather than the new sanctioning mechanism, noting the commission’s staffing and backlog challenges.

State Tax Commission legislative liaison Dan Hutton told the committee the commission had technical concerns about how to calculate the precise amount “over-assessed” and whether it would get the necessary data to implement the measure. He also raised a budgetary point: the commission’s current budget is limited, and paying interest if the commission later erred could be costly.

Witnesses and members discussed possible amendments, including expanding the mechanism to use both sales and use tax or specifying shorter deadlines and clearer administrative procedures. Fowler said he was open to amendments and to working with House Research and the commission to clarify procedures.

The hearing included multiple speakers both for and against the bill; members said they would continue discussion and suggested follow-up work with House Research and the State Tax Commission to tighten language on timing, scope and remedies.

Ending: The committee closed the public hearing portion on HB 999 and moved into executive session business unrelated to the bill. No committee vote on HB 999 was recorded in the transcript.