Tax audit reveals state legislature lacks accurate tax exemption tracking

9 months 1 week 9 hours 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
JEFFERSON CITY (AP) — Missouri Attorney General Josh Hawley has charged a former Greenville city clerk with stealing more than... More >>
1 hour ago Thursday, July 19 2018 Jul 19, 2018 Thursday, July 19, 2018 3:07:00 PM CDT July 19, 2018 in News
JEFFERSON CITY (AP) — State conservation officials say six black bears have died after being hit by vehicles in Missouri... More >>
1 hour ago Thursday, July 19 2018 Jul 19, 2018 Thursday, July 19, 2018 3:02:00 PM CDT July 19, 2018 in News
ALBANY (AP) — Prosecutors say a northern Missouri man and woman subjected an 11-year-old girl to nearly a year of... More >>
1 hour ago Thursday, July 19 2018 Jul 19, 2018 Thursday, July 19, 2018 2:54:00 PM CDT July 19, 2018 in News
POPLAR BLUFF (AP) — A police detective and an official with the U.S. Marshals Service are recovering after being shot... More >>
1 hour ago Thursday, July 19 2018 Jul 19, 2018 Thursday, July 19, 2018 2:39:00 PM CDT July 19, 2018 in News
KANSAS CITY, Mo. (AP) — A southern Missouri sheriff and a subordinate have been indicted on multiple felonies following a... More >>
1 hour ago Thursday, July 19 2018 Jul 19, 2018 Thursday, July 19, 2018 2:33:00 PM CDT July 19, 2018 in News
MANSFIELD (AP) — The Missouri State Highway Patrol says a Florida man suspected of shooting a trooper is hospitalized in... More >>
1 hour ago Thursday, July 19 2018 Jul 19, 2018 Thursday, July 19, 2018 2:19:00 PM CDT July 19, 2018 in News
KANSAS CITY, Mo. (AP) — Three carnival workers have been arrested in the deaths of two vendors who disappeared from... More >>
2 hours ago Thursday, July 19 2018 Jul 19, 2018 Thursday, July 19, 2018 2:16:00 PM CDT July 19, 2018 in News
COLUMBIA - A new study released Wednesday by Climate Central found conservation farming practices can help promote healthier soil and... More >>
3 hours ago Thursday, July 19 2018 Jul 19, 2018 Thursday, July 19, 2018 1:09:00 PM CDT July 19, 2018 in News
COLUMBIA - The United States Air Force (USAF) Band of Mid-America is partnering with Columbia Parks and Recreation to present... More >>
6 hours ago Thursday, July 19 2018 Jul 19, 2018 Thursday, July 19, 2018 10:00:00 AM CDT July 19, 2018 in News
(CNN Money) -- Facebook CEO Mark Zuckerberg tried to clarify his controversial comments about Holocaust deniers Wednesday afternoon, hours after... More >>
7 hours ago Thursday, July 19 2018 Jul 19, 2018 Thursday, July 19, 2018 8:33:00 AM CDT July 19, 2018 in News
COLUMBIA – Four National Handball Champions are coming to Columbia Saturday. Wilson’s Fitness on Forum Boulevard is hosting its... More >>
8 hours ago Thursday, July 19 2018 Jul 19, 2018 Thursday, July 19, 2018 7:35:00 AM CDT July 19, 2018 in News
MARIES COUNTY - At the City of Belle Fair, officers arrested a sex offender carrying a stun-gun Wednesday night. ... More >>
11 hours ago Thursday, July 19 2018 Jul 19, 2018 Thursday, July 19, 2018 4:47:00 AM CDT July 19, 2018 in News
KANSAS CITY (AP) — A man who was shot to death on Sunday after shooting three Kansas City police officers... More >>
19 hours ago Wednesday, July 18 2018 Jul 18, 2018 Wednesday, July 18, 2018 8:33:33 PM CDT July 18, 2018 in News
MANSFIELD (AP) — The Missouri State Highway Patrol says a trooper who was shot in southwest Missouri has been released... More >>
19 hours ago Wednesday, July 18 2018 Jul 18, 2018 Wednesday, July 18, 2018 8:28:02 PM CDT July 18, 2018 in News
COLUMBIA - Run-down buildings, scuffed up sidewalks and empty lots are what people first see when they exit off I-70... More >>
19 hours ago Wednesday, July 18 2018 Jul 18, 2018 Wednesday, July 18, 2018 8:23:00 PM CDT July 18, 2018 in News
ST. LOUIS (AP) — The white former interim police chief of St. Louis is alleging discrimination based on race in... More >>
19 hours ago Wednesday, July 18 2018 Jul 18, 2018 Wednesday, July 18, 2018 8:20:28 PM CDT July 18, 2018 in News
COLUMBIA - Japanese beetles are swarming mid-Missouri in the tens of thousands, wreaking havoc on gardens, crops and trees. ... More >>
19 hours ago Wednesday, July 18 2018 Jul 18, 2018 Wednesday, July 18, 2018 8:18:00 PM CDT July 18, 2018 in News
WASHINGTON (AP) — Donald Trump will visit Missouri next week to deliver his first address as president to the annual... More >>
20 hours ago Wednesday, July 18 2018 Jul 18, 2018 Wednesday, July 18, 2018 8:13:07 PM CDT July 18, 2018 in News
Columbia, MO
Broken Clouds 80°
5pm 90°
6pm 87°
7pm 83°
8pm 80°