Ray McCarty testifies before the Study Commission on State Tax Policy

Ray McCarty testified at a meeting of the Study Commission on State Tax Policy in Springfield last Wednesday, August 17. He discussed a recent change in the application of sales and use taxes to shipping charges, and spoke against a suggestion by one of the workgroups of the Commission to limit the timely filing discount provided to employers and retailers for collecting and administering sales/use and withholding taxes.

McCarty presented testimony to the Tax Administration Workgroup of the Commission, applauding the Department of Revenue (DOR) for sending notices to taxpayers regarding the change in tax policy, but contending that regulations on the subject should also have been changed through the regulatory process.  He told the Workgroup that taxpayers will usually comply if they know the rules, but the DOR’s rules are currently not in sync with their position.  He talked about the advantages of refining a policy through the regulatory process and stated Associated Industries of Missouri is convening a meeting with DOR officials to discuss the topic later this week.

In his testimony to the full Commission, McCarty explained that according to national data, the timely filing allowances for sales/use and withholding tax should be increased to at least 3%, rather than limiting the current allowances as suggested by one of the workgroups. He also stated that employers and retailers assume the risk of collecting and paying the proper amount of tax and that the state should compensate them for that risk.

McCarty’s testimony to the workgroup may be read here, and his testimony to the full Commission may be read here.