House sends tax amnesty bill to the governor

A bill designed to bring a in a little more revenue for the state’s coffers is on its way to Governor Nixon.

The Missouri House yesterday gave final passage to House Bill 384 which authorizes a period of amnesty for those who owe late state taxes. The bill sponsored by House Budget Chairman Rep. Tom Flanigan would allow any individual taxpayer or tax paying entity to pay delinquent taxes due on or prior to December 31, 2014 without penalty or interest, if they are paid between September 1 and November 30, 2015. Flanigan and experts at the Capitol believe the amnesty program would bring in about $25 million in new revenues that would not otherwise be collected.

The legislation also picked up language in the Missouri Senate that mandates that any funds brought in by the amnesty program go to fund some Medicaid programs, such as dental care. Despite some objections to that language, the bill gained final passage in the House by a 150 to 4 vote. Governor Nixon has been a supporter of similar language in the past and the budget is based on passage of this bill, making signature likely.

Additional items were added to the bill that are also taxpayer friendly, including adding a provision to the Taxpayer Bill of Rights that states taxpayers have a right to fair and consistent application of the tax laws, the creation of a Study Commission on Tax Policy to examine sales tax law thoroughly and make recommendations for changes to modernize the tax code, and creation of an Office of Taxpayer Advocate in the Department of Revenue. The current Office of Taxpayer Ombudsman would be eliminated.

Another less popular provision that was added to the bill would allow the DOR to use a third party collection vendor to collect amounts determined by the DOR to be due under the voluntary disclosure amnesty program. Of course, because the amnesty program is a voluntary program, no such use is necessary and we are assured by the DOR that no such use is anticipated, nor was such authority requested.  We object to any third party determination of tax liability, especially when the vendor is paid through a percentage of findings and worked to remove the amendment, but because of the quickness with which this bill was rushed through the system, the amendment was included in the final bill.  Bottom line: the use of the third party vendor is unnecessary, DOR says they will not use them, and they appear to only be used for amounts determined by DOR to be due (not for the determination of tax liability). We will keep a close eye on this situation.