Davis: Tax Refunds

(Photo credit: Vince McGee, Logan College Director of Media Services)

Logan College of Chiropractic invited me to speak during A Tribute To Remember: Memories of Our Country's Heroes, a ceremony honoring those who have defended our nation.  It was my privilege to honor those who place their lives on the line every day.

State Tax Refunds

Several of my constituents have called my office to ask why they have not received their income tax refunds, especially since April 15^th is becoming a distant memory.  Some of you may remember last year when we had a similar problem:  2009 Capitol Report: Tax Refunds. Last year the State of Missouri used federal economic stimulus money to pay back our refunds.  It should not have cut itself so closely. Returning money that is rightfully owed to our residents should be timely. The taxpayers should not be used as a bank.

It would be better if we could do one calculation at end of the year when we knew exactly how much was owed to the State.  This would not only be fair, but no income tax refunds would be due.  The idea that the government must require the taxpayers to make gradual estimated taxes is insulting to the integrity of the tax payers.

Funny---the reason the state demands "Pay as you go" taxation is because it is afraid the taxpayers will not properly handle their budget so they will be able to pay at the end.  However, isn't this exactly what the state has done in the reverse?  The bill is due and the state doesn't have enough to pay it back in a timely fashion.

This is why I cosponsored a bill HB 1514 that requires the state to pay interest on unpaid tax refunds after 45 days. Currently, the state doesn't have to pay interest until the refund is delayed more than 4 months. During the legislative process this bill was modified to income tax refunds paid after 90 days. We were successful at getting this bill to the governor's desk where it is now waiting to be signed.  It will not become law until August 28^th, so if you are waiting for a refund this year, it will not make a big difference, but the state must do a better job to return people's money to them when it is due, not treating them like a revolving line of credit.

For the state to delay payments is just as embarrassing as discovering in the check out line of a store that you don't have enough money to cover what you have on the counter.  I have plenty of compassion for those who go through this, because it's probably happened to all of us. However, there is no excuse for government to not plan ahead. The recession didn't sneak up on us.  We knew for years that we were in lean economic times, and it behooves all of us to plan accordingly.

In case you are one of those who is stuck waiting on your refund, here is what I discovered regarding tax refunds and Missouri' fiscal condition:

• Missouri Statues require the Department of Revenue (DOR) to mail a tax refund within 120 days from the day a filed tax form is received. Lag times vary week to week, especially when filed close to April 15.
• The sooner in the year you file your State tax form the quicker you'll receive your refund. For example those who file sometime January to March will have their forms processed before the April 15 "crunch-time" when the DOR is inundated with forms to process.
• The Missouri Budget Book FY 2011(NOTE: FY=fiscal year; Missouri's 2011 fiscal year runs from July1, 2010 to June 30, 2011) adjusts the FY 2010 Consensus Revenue Estimate (net general revenue) down by $794 million from the previous year's estimate. You can link here to these resources: Missouri's Budget Facts
• The fiscal year for the state ends on June 30^th. Year to date, the state's revenue is nearly 8% below expected revenues when the budget was initially approved.  That means the state is now short by more than $5.5 million dollars and that number may increase before the end of the fiscal year.
• In the 2009 fiscal year, our public schools received $5,340,147,253. In the 2011 fiscal year, our public schools are on schedule to receive $5,363,104,875. While that may seem like a lot of commas to you, the bottom line is that our schools are getting over 23 million more this year than they received two years ago.
• Overall the state is still faring better than many businesses. The state's 3.8% decrease in net sales tax revenue (this percentage is anticipated to be higher by the end of the fiscal year). Missouri still employs more than 35,000 people and there is no chance the state will be going out of business.
• Missouri is one of the more financially stable states and has received triple-A ratings from three of the nation's top-rating agencies: Standard & Poor's, Moody's Investors Service and Fitch.

FYI:  If you want to know your Federal refund status, you can call the IRS toll free 1-800-829-1954.

Your thoughts are important to me, so please let me know what you think about the state budget and getting your income tax refund. You can send me your opinion by clicking here: Cynthia Davis

A Little Bit of Humor . . .

If Congress can pay farmers not to raise crops,
Why can't we pay Congress not to raise taxes?

President Herbert Hoover was the first President to give his salary back to the government.
Now the government would like everyone to do it.