Vetoed Tax Cut Could Cost MO Big if Passed
Now we know another reason why Governor Nixon vetoed a big income tax cut, it could cost Missouri an extra $1.2 billion.
At a briefing Tuesday, the governor’s office says language in the tax cut bill lowers Missouri’s rate by 0.5% if Congress passes the so-called “Internet Sales Tax.” It could cost the state $300 million a year, and that’s not including a 0.5% rate cut that’s supposed to be slowly phased in as state revenues rise.
Nixon legal adviser Chris Pieper says the language of the state bill multiplies the impact by applying the cut to previous tax years.
“What that means is that taxpayers, can come to the Department of Revenue,[and] file a tax refund, seeking a refund of taxes they have already paid anytime in the previous three years,” Pieper says.
That means if everyone asked for refunds at once, it could cost the state $1.2 billion in one fiscal year. Republican lawmakers have previously said they could fix a part of the bill that eliminates a prescription drug tax credit, if only Governor Nixon signs it. There’s no word yet on if they’d do the same with the retroactive rate cut if it goes into effect.
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