Tax audit reveals state legislature lacks accurate tax exemption tracking

1 month 1 week 2 days ago Wednesday, October 11 2017 Oct 11, 2017 Wednesday, October 11, 2017 8:51:00 AM CDT October 11, 2017 in News
By: Carolina Brigagao, KOMU 8 Reporter
loading

JEFFERSON CITY - An inspection of Missouri's revenue shows there is no tax exemptions tracking system, a problem which - according to Missouri State Auditor Nicole Galloway - helped the state's half-billion budget shortage. 

During a news conference on Wednesday, Galloway released a report on the cost of tax incentives and exemptions. This report comes as part of Galloway's Budget Integrity Series. The series, which began in March, highlights “weaknesses in policymaking, and finds the root causes of budget shortfall.”

The tax incentive and exemptions report shows sometimes state funds are formulated with dated information. It also found the process of fund formulation lacks the economic analysis required, and no follow-up is conducted to evaluate the accuracy of the funds and the actual impact.

"Unless the legislature does a better job assessing the costs and benefits of their policy decisions, the state will continue to jeopardize its fiscal health and threaten critical services for Missourians," Galloway said.

For example, the report shows a law passed in 2015 created a new way to allocate corporate income. The legislature estimated a cost of $15.2 million each year, but in the two years following the law's creation, corporate income tax collection decreased five times the initial estimated amount. 

The report also shows that Missouri retailers' sales tax discount is the second highest in the nation. Retailers received a two percent tax discount for paying sales taxes on time. Missouri is also the only state that offers similar tax discounts to businesses. 

"While Missourians absorb dramatic restrictions on higher education funding and cuts to prescription drugs and in-home nursing care, the state is giving away millions to corporations for simply doing what the law requires," Galloway said. 

Rep. Gina Mitten, D-St. Louis, agrees with the report and that Missourians should know where their money is going to.

"Those are our dollars, those are our tax dollars," Mitten said. "Most voters in Missouri don't realize that they pay their sales taxes to Walmart, Walmart gets to take two percent of the top just for submitting that to the state in a timely fashion."

The report also found the state does not monitor all the tax exemptions it gives. The Department of Revenue only tracks three specific individual exemptions out of the more than 200.

"Based on prior attempts to track limited exemptions, the data collected is likely to be highly inaccurate due to businesses errors in reporting. In addition, to track and report exemptions, the DOR would require a substantial increase in full-time employees, which the current budget does not support," according to a DOR statement in the report. 

Galloway's budget series, released in March, has six key audits, including:

  • The annual review of state use of federal dollars, known as the Statewide Single Audit
  • The annual review of state revenue, known as the Hancock Amendment Report
  • Missouri’s economic rankings compared to other states
  • An audit of tax credit programs
  • An audit of sales, corporate and income tax exemptions and impacts
  • An audit of the state's timeliness of issuing tax returns

More News

Grid
List
COLUMBIA - A video surfaced from Thornbrook Ridge in southwest Columbia showing an individual stealing packages from the doorsteps of... More >>
2 hours ago Sunday, November 19 2017 Nov 19, 2017 Sunday, November 19, 2017 8:00:00 PM CST November 19, 2017 in News
COLUMBIA - The 38th Annual Holiday Parade kicked off with sirens as police cars took the lead. The parade... More >>
4 hours ago Sunday, November 19 2017 Nov 19, 2017 Sunday, November 19, 2017 6:09:00 PM CST November 19, 2017 in News
ST. LOUIS (AP) — Two students who studied at Washington University in St. Louis have been selected as Rhodes scholars.... More >>
4 hours ago Sunday, November 19 2017 Nov 19, 2017 Sunday, November 19, 2017 5:21:00 PM CST November 19, 2017 in News
COLUMBIA - A 29-year-old man was in serious condition Sunday afternoon at University Hospital following a shooting Sunday morning. Columbia... More >>
5 hours ago Sunday, November 19 2017 Nov 19, 2017 Sunday, November 19, 2017 4:12:00 PM CST November 19, 2017 in News
NIXA (AP) — A city in southwest Missouri has opened the largest solar farm in the state. The Springfield... More >>
9 hours ago Sunday, November 19 2017 Nov 19, 2017 Sunday, November 19, 2017 12:34:00 PM CST November 19, 2017 in News
NASHVILLE, Tenn. (AP) — Drew Lock threw three touchdown passes and Missouri won its fifth straight game to become bowl... More >>
15 hours ago Sunday, November 19 2017 Nov 19, 2017 Sunday, November 19, 2017 7:07:00 AM CST November 19, 2017 in News
COLUMBIA - A suspect struck a victim, and suspects fired multiple rounds, brandished at least one firearm and took property... More >>
22 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 11:45:00 PM CST November 18, 2017 in News
COLUMBIA – While in Chad, Haby Naya learned how to braid hair by doing her friend’s, sister’s and even her... More >>
22 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 11:25:00 PM CST November 18, 2017 in News
COLUMBIA - If experience is important for success in sports, basketball players worldwide have much to learn from the Granny... More >>
23 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 10:53:00 PM CST November 18, 2017 in News
ST. LOUIS (AP) — The nonprofit group behind the long-delayed streetcar set to operate in St. Louis' Loop area and... More >>
1 day ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 8:41:00 PM CST November 18, 2017 in News
BOONE COUNTY - A 19-year-old college freshman was driving home for Thanksgiving break Saturday when a tire on his car... More >>
1 day ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 7:15:00 PM CST November 18, 2017 in News
COLUMBIA - Dozens of people came out Saturday for the eighth annual Fall Into Art show at Parkade Plaza. ... More >>
1 day ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 5:19:00 PM CST November 18, 2017 in News
HARRISBURG - A warm bed, a hot meal, and hugs from a loving family member are common enough memories for... More >>
1 day ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 3:00:00 PM CST November 18, 2017 in News
CAMDEN COUNTY - Two Osage Beach residents were pronounced dead early Saturday morning following a single-car crash late Friday night.... More >>
1 day ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 2:54:00 PM CST November 18, 2017 in News
JEFFERSON CITY - A Macon man and two others were hospitalized Saturday morning in one of two crashes that occurred... More >>
1 day ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 2:24:00 PM CST November 18, 2017 in News
COLUMBIA – New blood pressure guidelines mean nearly half of adults in the U.S. that did not have high blood... More >>
1 day ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 2:12:00 PM CST November 18, 2017 in News
ST. LOUIS (AP) — Officials are testing for asbestos among the debris left from a massive St. Louis warehouse fire.... More >>
1 day ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 1:17:00 PM CST November 18, 2017 in News
ST. LOUIS (AP) — A Missouri prosecutor will not file criminal charges against a Southwest Airlines pilot arrested after Transportation... More >>
1 day ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 1:07:54 PM CST November 18, 2017 in News
Columbia, MO
Broken Clouds 33°
11pm 35°
12am 35°
1am 35°
2am 37°

Select a station to view its upcoming schedule:

Coming Up Next

7:20p
Sunday Night Football
10:30p
KOMU 8 News @ 10
11:05p
Sports Extra with Chris Gervino
10:00p
Seinfeld
10:30p
Family Guy
11:00p
Paranormal Activity 3

Tonight's Schedule

6:00p
Football Night in America
7:20p
Sunday Night Football
7:00p
The Face of an Angel
9:00p
KOMU 8 News @ Nine on The CW
9:30p
Family Guy