Missouri Sets Tax Amnesty Period for 2015

Late last week, Missouri Gov. Jay Nixon signed HB 384, which establishes a three-month tax amnesty period, from Sept. 1, 2015, to Nov. 30, 2015. The amnesty applies to tax liabilities due, and due but not paid, as of Dec. 31, 2014. As with all states’ tax amnesty programs, the opportunity is not available for any taxpayer party to a criminal investigation, or pending civil or criminal litigation stemming from tax delinquency, non-payment, or fraud.

In order to be eligible, a taxpayer must have filed a tax return for each taxable period for which amnesty is sought, and pay the entire balance by Nov. 30, 2015. Any taxpayer granted amnesty is obligated to comply with all Missouri tax laws for the next eight years, the failure of which will trigger the requirement to immediately pay all waived penalties, taxes, and interest. In addition, any amnesty recipient is ineligible to participate in any future amnesty for the same type of tax, and waives any right to an appeal.

The state will deposit most amnesty payments into a Tax Amnesty Fund to be used for the following:

• To increase the rate of reimbursement to MO HealthNet providers; and
• To increase the number of adults receiving dental coverage under MO HealthNet.

According to the News Tribune, researchers estimate that the amnesty program will bring in more than $60 million in Missouri’s fiscal year 2016, which begins on July 1, 2015.

Missouri will likely need this extra revenue. In March, the Missouri Budget Project reported that the state was on track to meet its revenue estimate, but even so, the amount is insufficient to cover last year’s budget. This means that the new year will start with a shortfall, so the first priority will be to compensate for “last year’s unmet services before adding to the budget.”

Fox2now.com reported that last year, lawmakers budgeted for an anticipated $50 million from a tobacco settlement that has not yet come, which is one reason for the shortfall. Another unanticipated circumstance occurring this fiscal year is increasing drug costs under the Medicaid healthcare program. Gov. Nixon responded by approving $82 million in general revenue for the Medicaid pharmacy program.

In his budget proposal summary, the governor acknowledged that he reduced the state workforce to its lowest level in two decades, but also put Missouri “back on solid financial ground,” evidenced by the fact that it retains its AAA credit rating with all three rating agencies. Anticipating moderate revenue growth of 4.6 percent and 3.6 percent respectively, in the remainder of fiscal year 2015 and 2016, Gov. Nixon “recognizes improved economic growth while safeguarding the state’s future fiscal health.”