Tax audit reveals state legislature lacks accurate tax exemption tracking

2 years 9 months 3 weeks 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
LIBERTY, Mo. (AP) — State Rep. Jon Carpenter is the likely winner of a Democratic primary for a Clay County... More >>
21 minutes ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 5:13:44 PM CDT August 07, 2020 in Continuous News
COLUMBIA — The SEC has announced two more games of the 2020-2021 football season. MU will play Alabama in... More >>
1 hour ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 4:12:00 PM CDT August 07, 2020 in News
COLUMBIA —American Outdoor Brands partnered up with The Job Center Staffing in order to make applying for jobs accessible during... More >>
1 hour ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 4:01:00 PM CDT August 07, 2020 in News
COLUMBIA — Over the past two weeks, MU has laid off an additional 13 employees and furloughed 34 according to... More >>
1 hour ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 3:51:00 PM CDT August 07, 2020 in News
COLUMBIA —Local artist and MU alum David Spear finished his newest project on the wall outside of Harpo's: a tiger.... More >>
2 hours ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 3:26:00 PM CDT August 07, 2020 in News
COLUMBIA — MU's College of Engineering has been producing face shields for professors to wear on campus this fall since... More >>
2 hours ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 3:07:00 PM CDT August 07, 2020 in News
JEFFERSON CITY— State senators on Friday passed a bill proposed by Republican Gov. Mike Parson to address a surge... More >>
2 hours ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 3:00:27 PM CDT August 07, 2020 in News
PETTIS COUNTY — A group of eight Pettis County residents filed a petition for declaratory judgement against the Pettis County... More >>
3 hours ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 2:13:00 PM CDT August 07, 2020 in News
JEFFERSON CITY — Lawyers representing citizens across Missouri argued in Cole County Circuit Court Friday that the proposed ballot title... More >>
3 hours ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 2:13:00 PM CDT August 07, 2020 in News
ST. LOUIS — Friday's Cardinals game against the Cubs is canceled after an additional Cardinals player tested positive for COVID-19,... More >>
4 hours ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 12:55:00 PM CDT August 07, 2020 in News
MISSOURI — Back to school shopping? This weekend, sales tax won't apply. From Friday through Sunday, certain back to... More >>
6 hours ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 11:10:00 AM CDT August 07, 2020 in News
( Missourian ) - Longtime Columbia physician Elizabeth Allemann is leading an effort — joined, so far, by 49... More >>
7 hours ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 10:01:51 AM CDT August 07, 2020 in News
JEFFERSON CITY - Three organizations received $1 million each through the U.S. DHSS to "continue fighting the opioid crisis in... More >>
7 hours ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 9:50:33 AM CDT August 07, 2020 in Continuous News
(CNN) -- The coronavirus pandemic has turned life upside down around the world, with many workers losing their jobs, economies... More >>
8 hours ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 9:28:00 AM CDT August 07, 2020 in A Brighter Tomorrow
MEXICO - Prosecutors filed charges Friday against a teenager in connection with Wednesday's shooting that left one 17-year-old dead and... More >>
9 hours ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 8:28:00 AM CDT August 07, 2020 in News
(CNN) -- The US economy added another 1.8 million jobs in July, a sharp slowdown from June and a small... More >>
9 hours ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 8:07:00 AM CDT August 07, 2020 in News
As COVID-19 continues to spread, KOMU 8 will continue to update you about impacts in the community. You can... More >>
11 hours ago Friday, August 07 2020 Aug 7, 2020 Friday, August 07, 2020 5:51:00 AM CDT August 07, 2020 in News
ST LOUIS – The St. Louis Cardinals are set to face the Chicago Cubs Friday after a COVID-19 outbreak among... More >>
21 hours ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 8:28:00 PM CDT August 06, 2020 in Top Stories
Columbia, MO
Broken Clouds 85°
6pm 84°
7pm 83°
8pm 81°
9pm 78°