Senate gives initial approval to two pro-taxpayer bills

The Missouri Senate Wednesday morning gave first round approval to legislation allowing individual taxpayers to get back overpaid tax money that’s rightfully theirs and clarifying all corporations may use a new method of dividing income between states that was passed in 2013.

Both bills were sponsored by Senator Will Kraus (R-Lee’s Summit).

Senate Bill 19 is tax apportionment language pertaining to the division of corporation income that was overwhelmingly passed in six different bills by the Missouri House and Senate last session, but vetoed each time by Governor Jay Nixon. It helps determine the amount of income that is taxed in Missouri and the amount that is taxed in other states. It ensures that Missouri businesses that do business in other states are not double taxed and clarifies the language passed in 2013.  The Missouri Department of Revenue originally issued a regulation that is still in effect saying the 2013 law applies to all corporations, then issued letters denying the application of the new law to some taxpayers.  The bill received vocal support from members of both parties on the Senate floor.

Senate Bill 115 allows taxpayers to claim a credit or a refund for overpayment of income taxes after the statute of limitations for making a claim has expired if,  taxpayer amends his or her federal income taxes, or if the IRS amend the taxpayer’s federal income tax return, after the statute of limitations has expired.

Some opponents of the bill argued that such mistakes are not common place and that the state should be allowed to keep the over-payed tax after the statute of limitations because the tax payer did not catch the mistake.  Associated Industries of Missouri testified in the hearing on the bill that taxpayers should always be able to retrieve money they have overpaid to the government.

“The state shouldn’t be stealing money from taxpayers,” said Sen. Kraus during debate on the Senate floor on SB 115. “The bill is about giving money back to the people who are owed it.”

SB 115 cleared the Senate on Thursday and SB 19 faces one more vote in the Senate before moving on the Missouri House.  The House is also advancing similar legislation.