JEFFERSON CITY, Mo. — Big businesses in Missouri are given an award for doing something that they are required, by law, to do.
The state offers millions to businesses for paying sales taxes on time, according to an audit released by Auditor Nicole Galloway on the collection of sales and use tax for fiscal year 2018.
“Missourians have no idea that hundreds of millions of their tax dollars are funneled to corporations for simply doing what the law already requires,” Auditor Nicole Galloway said.
“As I have done before, I am urging legislatures to change the law to limit the discount that benefits the state’s largest retailers. The state must do a better job determining which policies are working and which aren’t.”
The audit found that in fiscal year 2018 approximately $124 million in sales and use taxes paid by taxpayers was then retained by businesses due to the discount.
This 2% discount given by the state is the second-most generous such discount in the country.
The Department of Revenue only tracks three of over 200 sales and use tax exemptions on state and local revenue, so determining the actual fiscal impact is difficult and leaves the legislature unable to make good decisions about the effectiveness and cost of the untracked exemptions.
Similar concerns were raised during Galloway’s Budget Integrity Series. A 2017 audit found the legislative giveaways were undermining the state’s fiscal health and recommended changes to state law to ensure accurate tracking of their impact.