Section 22 Restricting Scope of ?Tax, License or Fees?

• Library: Tax Law 2009

In Pace v. City of Hannibal, 680 S.W.2d 944 (Mo. banc 1984), the Supreme Court of Missouri began a trend toward restricting the application of Missouri Constitution article X, § 22(a)’s, “tax, license or fees” language. In Pace, the Court held that the § 22(a) limitation did not apply to voluntary payments made “in lieu of franchise tax” by the Hannibal Board of Public Works into the city’s general revenue fund. Pace, 680 S.W.2d at 948. The payment “in lieu of franchise tax” was a voluntary payment of five and one-half percent of gross revenues paid by the Board of Public Works to the city in lieu of the franchise tax that would ordinarily be levied on investor-owned utilities. In 1981, the city raised rates for water and sewer services. Application of the five and...