Tip tax fix — New law stops revenue department overreach

 Should Missouri businesses be held accountable when their employees falsely report their personal income tax? A recent practice by the Missouri Department of Revenue was doing just that—forcing restaurants and other businesses to make up for lost state revenue when their employees didn’t properly report their tipped income.

But a bill signed into law finally ends this unfair overreach. Earlier this year, it came to light that the revenue department had started reviewing restaurant tip records. The department was calculating the tip percentage on credit card receipts and comparing that to the cash tips employees were reporting as income. When the percentages showed a discrepancy, the department went after restaurants to make up the difference.

Senate Bill 336 clarifies Missouri’s tax statutes on this matter, ensuring that only employees are accountable for their personal income tax liabilities.

“In this instance, the revenue department’s actions were as nonsensical and as hostile to small business as we’ve seen in a long time. Missouri business leaders understand the importance of paying taxes and contributing to state revenue, but it’s way over the line to expect businesses to pay their employees’ personal tax bills,” said Daniel P. Mehan, Missouri Chamber president and CEO. “On behalf of the state’s business community, I’d like to thank the General Assembly for making this a priority and for passing this bill with broad bi-partisan support.”

Senate Bill 336 was sponsored by Sen. Will Kraus, a Republican from Lee’s Summit.

The Missouri Chamber of Commerce and Industry (www.mochamber.com) is the largest business association in Missouri. Together, with the Missouri Chamber Federation, the Missouri Chamber represents more than 40,000 employers.

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About mochamber

The Missouri Chamber of Commerce and Industry understands that the quality of life in our state depends on quality jobs for Missourians. To that end, we have one simple mission: to protect and advance Missouri business.

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