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
(CNN) -- The coronavirus pandemic has turned life upside down around the world, with many workers losing their jobs, economies... More >>
21 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 >>
22 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 >>
23 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 >>
1 day 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 >>
1 day ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 8:28:00 PM CDT August 06, 2020 in Top Stories
Not only is there a global pandemic in the year 2020, we’ve also been dealing with a very active start... More >>
1 day ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 8:27:00 PM CDT August 06, 2020 in Weather
COLUMBIA - With just over two weeks until Mizzou's fall semester begins, KOMU 8's Emily Spain talked with MU Health... More >>
1 day ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 6:57:00 PM CDT August 06, 2020 in News
COLUMBIA — The City of Columbia will host a virtual information meeting Thursday at 7:30 p.m. to discuss new loan... More >>
1 day ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 6:03:00 PM CDT August 06, 2020 in News
COLUMBIA — Columbia/Boone County Public Health and Human Services director Stephanie Browning issued a new health order on Thursday. ... More >>
1 day ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 4:47:00 PM CDT August 06, 2020 in News
COLUMBIA — State and federal governments announced steps aimed at reining in violent crime in St. Louis Thursday, prompting... More >>
1 day ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 4:42:09 PM CDT August 06, 2020 in News
COLUMBIA - Missourians voted on Tuesday to pass Amendment 2, expanding Medicaid eligibility throughout the state. Joshua Dunne, chair... More >>
1 day ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 3:52:00 PM CDT August 06, 2020 in News
COLUMBIA - When COVID-19 began to shutdown mid-Missouri in March, many wondered how long the pandemic would last. Some... More >>
1 day ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 2:32:00 PM CDT August 06, 2020 in News
COLUMBIA — Missourians who qualify under the newly expanded Medicaid qualifications will have to wait almost a year to... More >>
1 day ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 2:28:00 PM CDT August 06, 2020 in News
As COVID-19 continues to spread, KOMU 8 will continue to update you about impacts in the community. You can... More >>
1 day ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 2:13:00 PM CDT August 06, 2020 in News
WASHINGTON — Sen. Josh Hawley's bill to ban TikTok on government devices passed the U.S. Senate unanimously on Thursday, according... More >>
1 day ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 12:51:00 PM CDT August 06, 2020 in News
JEFFERSON CITY —Four people have tested positive for COVID-19 following open testing at the Missouri Capitol. The state health... More >>
1 day ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 12:23:50 PM CDT August 06, 2020 in News
(CNN) -- Former First Lady Michelle Obama says she's suffering from a "low-grade depression." The reasons? The pandemic, race relations... More >>
1 day ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 10:53:00 AM CDT August 06, 2020 in A Brighter Tomorrow
At the beginning of the Coronavirus pandemic, NBC news reported people with eating disorders were suffering due to social isolation.... More >>
1 day ago Thursday, August 06 2020 Aug 6, 2020 Thursday, August 06, 2020 10:41:00 AM CDT August 06, 2020 in A Brighter Tomorrow
Columbia, MO
Broken Clouds 72°
8am 73°
9am 75°
10am 77°
11am 78°