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March 8 , 2002 Slamming the Door on Corporate Loopholes I’m sure that many of us can remember as kids being just a few cents shy of having enough money to go to the movies, or a ballgame, or having enough money to make it worthwhile to meet the ice cream truck. We would go through the sock drawer, shake the piggy bank one more time, or search the couch cushions to come up with enough change to meet our purchase objective. And more often than not, we were required to modify our purchase options to live within our means. This year, we are facing a similar challenge in state government: that is, prioritizing state services to conform with the resources at our disposal, and at the same time searching every nook and cranny to make sure each dime is accounted for and used for its intended purpose. Last week the Missouri House did just that in passing a bill that closes a corporate loophole that allowed big retailers to keep sales tax revenues when they overcharged their customers. Under current Missouri law, these overcharges -- due mainly to rounding errors -- must be returned to the customer, but in the event that the customer cannot be identified, the business is allowed to keep the overage. Last year, 69 businesses in Missouri were allowed to keep $31 million in sales taxes it overcharged its customers. We are certainly pro business in the Missouri General Assembly, as it is the business community -- particularly the small business owner -- that is responsible for the majority of the jobs and economic activity in the state. But we know these overcharges are not at the hands of the small business owner, as these 69 identified businesses overcharged their customers an average of nearly $450,000. And this came a fraction of a penny at a time. These sales taxes, paid by customers in good faith, were believed to be going toward state and local services. In our opinion, that’s where those funds should go. If approved by the Senate, this proposal will dedicate all sales tax overcharges where the original customer cannot be identified to their intended purpose: the funding of critical state services, which in this case is public education. We realize that in a budget year where we are facing $1 billion in shortfalls this is but one step, but it’s an important one in terms of our commitment to reach a balanced state budget. I want to say how proud I am of the members of the House, as we have made some real progress toward the funding of elementary and secondary education and our other priorities for the upcoming budget year. As a farmer, I know there are times when the crops are bad and you have to dig down deep to make ends meet. That is exactly the circumstance we are dealing with in Missouri’s current budget crisis. The House has taken some tremendous steps to make the most of the financial resources at its disposal, and has done so without even once mentioning the possibility of a tax increase. We have done this by making some tough decisions, making the most of what we have, and when we find a loophole, closing it. Just as with every farmer, every household in Missouri must balance its own budget. And in Jefferson City, so must we. | |||||
Paid for by Kreider for Senator.
Bobby Neal Jr., Treasurer. Not at taxpayer's expense.
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