09/16/2021
Missouri retailers kept $129 million in
sales and use tax in fiscal year 2020 just for paying their sales taxes on
time, by taking advantage of the most generous discount of its kind in the
nation. State Auditor Nicole Galloway highlighted the corporate handout in an
audit released today on the collection of sales and use tax by the Missouri
Department of Revenue (DOR). The finding is contained in similar audits from
her office for the past several years.
"I
again urge legislators to take a hard look at limiting this corporate giveaway,
which gives the biggest benefits to the wealthiest retailers just for turning
over sales tax paid by consumers," Auditor Galloway said. "Ordinary
citizens don't get a discount for paying taxes on time. The lack of a cap on
this handout to big business means millions of dollars lost that could be used
to fix streets, pay law enforcement, and improve the lives of Missourians. It's
just common sense."
The audit found the 2% discount given to
retailers for timely paying the sales and use tax they owe is the most generous
such discount in the country. In fiscal year 2020, approximately $129 million
in sales and use tax was paid by taxpayers, but then retained by businesses due
to the discount.
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 Missouri had applied a cap of $1,000 per month (the
highest cap used by any contiguous state) for fiscal year 2020, it would have
only impacted businesses with monthly sales of approximately $611,000 or more,
and resulted in approximately $76 million in additional state and local sales
tax revenue.
The audit noted that Missouri updated its
laws in 2021 to allow for the collection of sales tax from out-of-state sellers
for online purchases - one of the last states to do so. Previous audits from
Auditor Galloway had recommended the General Assembly close the loophole, which
put retailers with a physical presence in Missouri at a disadvantage from their
online competitors not in the state.
The complete audit, which gave a rating of
"good," can be found here.