New law aids businesses with taxes
COLUMBIA - A new law will make it easier for Missouri businesses to stay on top of tax policy changes.
Governor Nixon signed Senate Bill 18 into law on Monday.
The bill will require the Department of Revenue to notify business owners of any changes in tax laws.
Karen Buschmann, the Missouri Chamber of Commerce and Industry vice president of communications, said Senate Bill 18 was created to protect small businesses from what is called notification by audit.
Notification by audit means business owners are left with large sums of money that they didn't know they owed because they were unaware of certain taxes they were suppose to be collecting.
Buschmann said businesses were being dealt taxes for services that weren't taxed before.
"We found that a lot of small businesses were being targeted with back taxes on products and services that hadn't been taxable previously," Buschmann said.
This would have been the case for Amie Butler, owner of the Tiger Academy of Gymnastics.
"It was all of a sudden, we didn't really know about it, because usually services aren't charged," Butler said.
Another gym in Missouri sent Butler a mass email warning her of being responsible for sales tax. She said without the notification she would have never found out.
"I'm a newer business, so I don't think I would be able to afford the back sales tax when I hadn't been charging it, especially being a new business owner, I don't think I would have had the funds to pay it and still be open," Butler said.
The Missouri Department of Revenue will now be required to notify business owners of all changes. If businesses are not notified those taxes are not owed.
"Small businesses don't have lobbyists, they don't have lawyers who can stay on top of the Department of Revenue's interpretations and changes in their interpretations of the law," Buschmann said.
Buschmann said this bill will help small businesses.
The law will go into effect on August 28. Buschmann says until then businesses need to be aware.