Mo. lawmaker says FBI asking about sales tax bill

AP News
Posted: Dec 01, 2009 10:39 AM

The FBI has been asking questions about why Missouri House leaders blocked legislation earlier this year affecting millions of dollars worth of sales taxes charged by cities.

State Rep. Tim Jones told The Associated Press on Monday that he was contacted by telephone in October by an FBI agent inquiring why colleagues spiked the sales tax legislation he sponsored.

The agent "said they've been talking to a lot of people and they were interested in why the bill did not proceed further," said Jones, R-Eureka. "I told them, `You probably need to talk to the (House) speaker or the floor leader or both of them and find out what their official positions were on the bill.'"

The legislation at issue would have allowed cities to continue imposing multiple sales taxes for general purposes or capital improvements _ effectively negating lawsuits that contended the practice violated state law.

The bill was endorsed in early February by a House committee led by Jones. But House Speaker Ron Richard, R-Joplin, never referred the bill to the Rules Committee, which would have been the next step in the process. Richard said he held up the bill because of opposition from House Majority Leader Steven Tilley, R-Perryville. Tilley said he had done nothing improper.

A spokesman for the FBI office in St. Louis declined Monday to say whether an investigation was ongoing into the reason for the bill's failure.

"We contact a lot of public officials in the course of conducting our business, whether it's for an investigation, for liason or for simple questions. But we do not comment on specifics," FBI spokeswoman Rebecca Wu said in a written statement.

Missouri law allows cities to levy sales taxes of up to 1 percent for general purposes and up to one-half percent for capital improvements, subject to voter approval. About 75 cities, the largest of which include St. Joseph and Joplin, have imposed multiple sales taxes resulting in total tax rates above those thresholds, according to the Missouri Municipal League.

Farmington attorney Tom Burcham, a former Republican House member, sued several cities over the past couple years contending their stacked sales taxes violate state law. In ruling against the city of Iberia, a judge awarded Burcham $20,000 for attorneys fees, which Burcham said he later donated to several charities.

Burcham is a friend and constituent of Tilley and also is treasurer of the Missouri Leadership Committee, which gave $110,000 to Tilley's campaign committee in January. Tilley previously helped raise money for and contributed to the Missouri Leadership Committee.

Tilley said his respect for Burcham played a role in his opposition to the legislation that sought to negate Burcham's lawsuits.

But "the fact that the committee he runs gave me $100,000 has absolutely nothing to do with my position on the issue," Tilley said. "I think it's bad public policy for the Legislature to get involved in an ongoing lawsuit."

Burcham also denied any connection between the donations and Tilley's position on the legislation. Burcham said he had nothing to gain financially, because he wasn't paid to represent any clients in the lawsuits and didn't keep the money he won.

Tilley, who decides which bills get brought up for House debate, could have eventually scuttled the legislation. Instead, Richard halted the bill before it ever reached the House floor.

"Steve wasn't going to go to it; he felt he didn't like it," said Richard, who supported the legislation because it protected his home town's tax revenues. So "I thought rather than put him in a box, I'd just wait and try again" in 2010.

Richard, Tilley and Burcham all said Monday that they had not been interviewed by the FBI.

Jones said the FBI agent was "wondering why the speaker was in favor of the bill and why the floor leader wasn't." But Jones said told the AP he doesn't believe there was any impropriety involved in the failure of his legislation.

Republican House leaders, Burcham and the Missouri Municipal League said Monday that they were open to a compromise during the next legislative session that would allow cities already charging multiple sales taxes to continue doing so but would prohibit cities from stacking their sales taxes above the state cap in the future.

Burcham said he has dropped his lawsuits against cities because of the potential compromise but reserves the right to refile them if nothing passes during the 2010 legislative session.