The Legislature is succeeding in pushing back against the Missouri Department of Revenue’s (DOR) overreach into taxpayers’ pockets. It is vitally important we hold government accountable and stop overtaxing our businesses before it hurts Missouri’s job growth and economic development.

The DOR is notifying small business owners of changes in tax code interpretation through audits. In return, these businesses, which are driving Missouri’s economy, are being hit with thousands of dollars in back taxes for changes they were never notified of until the audit.  It is our duty to protect taxpayers and businesses from DOR’s aggressive practices, including this practice of notifying businesses of tax law changes through audits.

The Legislature passed a number of provisions that would protect taxpayers and businesses in the 2014 legislative session, most of which were vetoed by the governor. My colleagues and I reintroduced many of these measures aiming to ensure fairness for taxpayers.

Senate Bill 18 would require DOR to notify sellers if there is a change in tax law interpretation. This would allow sellers to adjust the amount of taxes collected on personal property and services in order to avoid large amounts of fines and back taxes. Under this law, a seller would not be held liable for additional taxes if they were not notified properly by DOR.

Senate Bill 115 addresses the unfair practice of allowing DOR to collect back taxes while refusing taxpayers a refund if a tax case is reopened after the statute of limitations has passed. If passed, SB 115 would allow a taxpayer to receive a credit or refund if they amend their returns or the IRS changes the taxpayer’s federal income.

Senate Bill 336 would modify provisions relating to income tax withholdings on employee’s tips. This measure would protect employers from carrying the liability of the additional taxes owed due to employees under-reporting tips earned.  This bill puts the liability of tax reporting on the appropriate party, rather than the employer. 

These bills have received approval from the Senate and have been sent to the House for consideration.

Please feel free to contact me with any questions or concerns at any time. We look forward to hearing your comments and suggestions, and will try to answer any questions you may have. You can reach us by phone at 573-751-1464, or e-mail at will.kraus@senate.mo.gov.