Missouri House Votes to Raise Newspaper Tax

By Robert Sandler
Associated Press Writer 

The Missouri House has voted to raise taxes on the state's two largest newspapers after an editorial in the St. Louis Post-Dispatch branded the Republican-led chamber the "House of Hypocrites."

Democratic lawmakers decried the tax proposal as retaliation. But the Republican sponsor insisted he was simply "closing corporate tax loopholes."

Legislators in many states over the years have considered taxes on newspaper publishing, but the actions of the Missouri House could be cause for alarm, Paul McMasters, an ombudsman at the Arlington, Va.-based First Amendment Center, said Thursday.

"Usually the newspapers -- and common sense -- manage to fight them off," McMasters said. "But it is a very troubling situation if indeed the effort is linked to trying to punish newspapers who have expressed criticism of the legislature."

On Sunday, the Post-Dispatch devoted an entire editorial page to criticism of the House of Representatives as the "House of Hypocrites." It included photos of 66 House Republicans who receive state-sponsored health insurance yet voted to approve legislation that would eliminate health coverage for thousands of poor Missourians on Medicaid.

While the House debated a tax-credit bill on Wednesday, Republican Rep. Richard Byrd of suburban St. Louis offered an amendment repealing a sales tax exemption for the state's two largest newspapers -- the Post-Dispatch and The Kansas City Star. It passed 74-72.

House Democratic Leader Rick Johnson, also of suburban St. Louis, accused Byrd of trying to punish the Post-Dispatch.

"What we have here is a retaliatory tax increase ... for revenge," Johnson said. "The other side of the aisle had some unfavorable press that was written about them over the weekend."

House Speaker Catherine Hanaway, another suburban St. Louis Republican, denied any vengeful motives, stressing that Byrd approached her about the amendment before the editorial ran.

But Hanaway said Thursday she could not recall whether the idea came up before or after the Post-Dispatch had contacted the House seeking information on lawmakers' health insurance plans.

Missouri law exempts all newspapers from state and local sales taxes on newsprint, ink, computers and other equipment. Byrd's amendment would remove the exemption for papers with at least $250 million in annual operating revenue and a Missouri-based average daily circulation of 200,000.

He said the law had allowed the Post-Dispatch, which is owned by Pulitzer Inc., and the Star, owned by Knight Ridder, to avoid $7 million in state sales taxes and $4 million in local sales taxes over the past decade.

Star Publisher Art Brisbane had no comment Thursday. Nor did Pulitzer and Post-Dispatch officials. But Post-Dispatch General Manager Matt Kraner said in Thursday's paper that he was surprised by the suddenness of the proposal.

The House gave the bill first-round approval on Wednesday. It needs another vote to advance to the Senate, where Majority Leader Michael Gibbons, a suburban St. Louis Republican, said its fate is uncertain.

"You wouldn't expect it to catch fire, but it could," he said.