NEWS RELEASE – Innocent until proven guilty: House votes to extend basic right to all businesses

 Arriving in court, the common assumption is innocence until proven guilty. Yet in Missouri, that right does not always apply to some businesses.

When the Missouri Department of Revenue chooses to take a company to court in a tax dispute, the company is actually presumed guilty unless it can prove otherwise. This unfair standard applies to Missouri companies with more than 500 employees and a net worth of greater than $7 million. All other taxpayers—individuals and smaller companies—are presumed innocent unless the Department of Revenue can establish guilt.

Today, the Missouri House of Representatives voted to end this bias against Missouri’s employers on a vote of 130-13. In approving House Bill 1455, sponsored by Rep. Denny Hoskins, R-Warrensburg, Missouri lawmakers are working toward bringing fairness to our state’s tax courts. The bill would allow all Missouri taxpayers to be treated as innocent until proven guilty.

“Fairness is the cornerstone of a functional legal system. Yet, in Missouri’s tax courts, we have different rules depending on who you are. It’s a biased system,” said Daniel P. Mehan, Missouri Chamber President and CEO. “We would like to applaud the House for making legal fairness a priority this session, as well as thank the Senators working on a similar measure in that chamber.”

Sen. Will Kraus, R-Lee’s Summit, has parallel language in Senate Bill 829. The Senate legislation has been passed by committee and awaits approval by the entire Senate.

 

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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.