(Jefferson City, MO) — Missouri State Auditor Scott Fitzpatrick says the state has the most generous timely sales and use tax discount in the nation. The comment comes after an annual review of Missouri Department of Revenue sales, use, and marijuana taxes. The Auditor’s office has given the Missouri Department of Revenue (DOR) a “good” rating, but recommends lawmakers consider capping the amount of discount retained by businesses each month. Fitzpatrick says he’s making the suggestion because the General Assembly faces the prospect of tougher budget years going forward.
“The timely discount does serve a meaningful purpose for the businesses that have to collect and remit these taxes, but a reasonable cap would better align the benefit to businesses of filing and remitting timely with the cost of doing so, and direct more of the sales tax revenue being paid by consumers to funding state services as the legislature faces the prospect of tough budget years where every tax dollar must be spent judiciously. As the members of the General Assembly work to craft a fiscally responsible budget and also consider replacing the income tax as the state’s primary revenue source with an expanded sales tax, they should read our audit report and consider our recommendation,” said Auditor Fitzpatrick.
Businesses in Missouri remitting sales and use taxes can keep two percent of sales taxes payable to the DOR if the business remits payments in a timely manner. The auditor’s office says that discount resulted in businesses retaining $184 million of sales and use tax collections in FY2024.
Fitzpatrick says if Missouri had a $1,000 per month cap (for example) it would have resulted in approximately $112 million in additional state and local tax revenue during fiscal year 2024.
The complete audit of the DOR sales, use, and marijuana taxes can be found here.
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