State Auditor Nicole Galloway today released an audit that highlights how Missouri gives the most generous discount in the nation to businesses just for paying their sales taxes on time.
The finding was in a report on the collection of sales and use tax by the Missouri Department of Revenue (DOR) for fiscal year 2019.
"This is the kind of government nonsense that Missourians can't stand," Auditor Galloway said. "No one gets credit for paying his or her taxes on time. So why should big retailers get this handout? As Missouri's independent watchdog, I'm again urging legislators to look at limiting this giveaway of tax dollars."
The audit found the 2 percent discount given to retailers for paying the sales and use tax they owe on time is the most generous such discount in the country. Unlike most of the other 26 states that offer a discount for timely payment, Missouri has no cap on the discount it gives. The audit said if the state applied a cap of $2,500 per month, it would only impact businesses with monthly sales of approximately $1.6 million and more. In fiscal year 2019, approximately $121 million in sales and use tax was paid by taxpayers, but then retained by businesses due to the discount.
The report also discussed how Missouri is one of only two states with statewide sales taxes that has not updated its laws to allow for the collection of tax from out-of-state sellers for online purchases. A U.S. Supreme Court decision in 2018 allowed states to charge taxes on purchases, even if the seller did not have a physical presence in the state. While bi-partisan legislation was proposed in the Missouri General Assembly during the 2020 session to update state law, it failed to pass.
The complete audit can be found here.
3 comments:
Missouri needs to wise up, probably too late, that republicans have been running the biggest con of them all. Imagine what that 121 million could have been used for in education, health care, roads and bridges and sanitation upgrades to protect our streams. Is there any common sense left in this knuckle dragging state?
Imagine thinking that the government would put that money to good use
It's generous, but most of the louts who post here (and Mrs. Galloway, herself, God bless her hatchet-wielding ass) need to reframe the question to how much it's worth to the state of Missouri to have these taxes paid on time. If it's not 2% but 0.2%, then by all means, let's lower the discount. I seem to recall criticism of the state's use of late tax refund payments to ride the float from Mrs. Galloway in this blog not 2 years ago.
Time-value of money is a real thing, unfortunately, and so is riding the float in cashflow, which cuts both ways, and is what the state may be doing here very pragmatically. I will not believe Mrs. Galloway's assertion until I see it in a spreadsheet and I can do the math myself. You shouldn't either.
Let's ask Mrs. Galloway and crew to come up with a reason they think 2% is too high and let's ask them to recommend an alternative discount rate based on sound statistical and economic analysis, not her fake-populist talking points. If she doesn't have the resources to do the analysis, let's get them for her.
Taxation is a complex thing and you can't get it right, you can only get it better. As much as I don't care for Mrs. Galloway's politics, she has done a good job making a bold claim about an important issue. I say we help her help our legislators turn it into a nuanced policy that doesn't turn into a naked power grab for her and her democrat friends.
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