Proposal would end bias against large businesses in tax suits

While “innocent until proven guilty” is the legal standard Americans are familiar with, in Missouri, that standard doesn’t always apply to larger companies.

In tax disputes between the state and large businesses, the companies are presumed guilty unless they can prove otherwise. This “guilty until proven innocent” standard in tax disputes applies only to companies with more than 500 employees and a net worth of greater than $7 million.

Everyone else in Missouri — individuals and small businesses — has the benefit of presumed innocence unless the state’s Department of Revenue can prove illegal tax activity occurred.

The Missouri Chamber of Commerce and Industry has long championed for changing this double standard, allowing everyone to have the same burden of proof when facing the Department of Revenue in court.

A bill to fix this problem was heard in the House General Laws committee this week. House Bill 1455 is sponsored by Rep. Denny Hoskins, R-Warrensburg.

Rep. Denny Hoskins

Rep. Denny Hoskins

The double standard was created in 1999. Prior to that year, all taxpayers were presumed guilty in tax cases. However in 1999, the Missouri Chamber championed legislation shifting the burden of proof to the department in most cases.

Now, the Missouri Chamber is working to make this standard fair and equal for all taxpayers.

“If you believe that our smaller taxpayers shouldn’t have to prove their innocence, the same concept should apply to everyone,” said Tracy King, vice president of governmental affairs for the Missouri Chamber.

The committee has not yet voted on Rep. Hoskin’s proposal.

For more information about tax issues please contact, contact Tracy King, Missouri Chamber vice president of governmental affairs, at tking@mochamber.com or by phone at 573-634-3511.

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Bill would help emerging businesses thrive

Angel Tax Credits are once again a topic in the Missouri legislature.  Bill 1310 offered by representatives Noel Torpey, R-Independence, and HB 1236 offered by Denny Hoskins, R-Warrensburg, were both heard in the House Small Business Committee on Wednesday.  Both bills would  create tax credits to promote  seed-financing capital for emerging businesses throughout the state.

“This legislation is vital to help us compete with other states,” Hoskins testified. “It also helps to promote entrepreneurship and small business here in the state of Missouri.”

The bills would provide tax credits to investors that provide early stage “angel” capital to qualified employers in the state. The tax credits are equal to 50% of the cash investment made by an investor.  The bills, however, differ in who administers the tax credits.  HB 1236 states the regional Missouri Small Business Technology Development Center must administer the credits, while HB1310 delegates the administration of the tax credits to the Missouri Technology Corporation.   The maximum tax credit allowed is $50,000 for a single, qualified Missouri business, or a total of $250,000 in tax credits in a single year per investor. Both bills are capped at $6 million per year and have a ten year sunset provision.

The Missouri Chamber has had a long-standing position of support for angel tax credits and testified on behalf of the bill. “Missouri is a great state for innovation and entrepreneurship,” King said. “The problem occurs when new incubated businesses get to a particular stage of growth, they’re lured away by states that have the Angel Tax Credits.  We must enact this legislation before we lose more potential businesses to other states.”

For more information about angel credits, please contact Tracy King, vice president of governmental affairs for the Missouri Chamber of Commerce and Industry at tking@mochamber.com or by phone at 573-634-3511.