House plan would ease late payment penalties, interest, in response to surprise tax bills

The House has given preliminary approval to giving Missourians a break on late payment of taxes, because many Missourians might have been surprised this year with a higher-than-anticipated tax debt.

“I’m also frustrated with the situation that brought us here, but today we can’t do anything about that,” said La Monte representative Dean Dohrman (R), the sponsor of House Bill 1094.  “But today, as Winston Churchill once said, ‘We can do the best we can with what we got.’”

HB 1094 would block late payment penalties on tax debt owed to the state by individual taxpayers through the end of this year.  It would also waive any interest owed on such debt until May 15.  For those who might pay penalties before the bill would become law, it would require that those Missourians receive refunds.

The bill is a bipartisan response to an issue with the Department of Revenue’s tax tables that resulted in many Missourians being faced with greater debt than expected.  Lawmakers heard stories of individuals who anticipated a tax refund from the state instead getting hit with bills for hundreds, or even thousands, of dollars.

Representative Nick Schroer (R-St. Charles) is the vice-chairman of the House oversight committee that’s been investigating that situation.  He said the Department’s explanations have changed, and he blames its former director, who resigned last month amid the crisis.

“We still don’t really know the true cause of what is happening.  We’re still digging and trying to figure that out, but I think this is one way that we can lessen this tax burden on these people who … dollars count to these people, whether it’s diapers, groceries,” said Schroer.

That oversight committee has continued to schedule hearings to investigate what caused the problems and how the Department responded.

House Minority Leader Crystal Quade (D-Springfield) also sits on that oversight committee, and pre-filed similar legislation in December.  She said the Department knew about the tax issue as early as September yet didn’t act for months to notify taxpayers.  She said she’s frustrated the House is only now taking action.

“Tax day’s in five days.  If folks in this body … I mean I hate to say it; if we were really concerned about these surprise tax bills and what was happening to citizens, we would’ve dealt with this much, much sooner,” said Quade.

“I heard time and time again from the director of revenue as well as the liaison that this isn’t a lot of money – that we’re talking an average of $85 or it could be upwards of several hundred dollars, and as I said before we have [legislative assistants] in this building who are seeing swings of $3500,” said Quade.

Lawmakers including Columbia Democrat Kip Kendrick, another oversight committee member, want Missourians to understand that their issues with tax debt might not be over after this year.

“If they’re concerned with their bill this year then they need to go back and look at their W-4 because next year, 2019, their current year, it’s going to be a full four quarters of potential under-withholding and not just three quarters,” said Kendrick.

Republicans, including Noel representative and oversight committee member Dirk Deaton, maintain that while some Missourians could see greater tax bills this year, changes in the federal tax code mean their overall debt is down.

“Missourians are keeping more money in their pockets, so we’ve got to fix this withholding thing but at the end of the day Missourians, as they should, are keeping more of their hard-earned money,” said Deaton.  “That’s what I think people need to realize.”

Another favorable vote would send HB 1094 to the Senate.