House members are being asked to increase the cap on a successful benevolent tax credit that supports organizations that help the state’s homeless population. The sponsor says donors who apply after that cap is reached are being penalized.
Representative Phil Amato (R-Arnold) is the volunteer President of the Board for a food pantry in Arnold, and he said organizations like that one have benefitted greatly from the food pantry tax credit.
“It has worked so well it has exceeded its cap,” Amato told the Special Committee on Public Policy.
This tax credit has been in existence since 2013. It allows Missouri taxpayers who make donations to food pantries, soup kitchens, or homeless shelters to deduct an amount equal to half that donation from their state taxes.
The program is capped at $1.75 million. Amato said in the last few years Missourians have been donating enough to reach that cap. What happens to donors after that, he said, is alarming.
“The donor gets a letter from the Department of Revenue that says we’re disallowing some of your tax credit and you need to make a remittance for the amount of money that we’re disallowing, and you owe us penalty and interest, on a donation,” Amato said. “When I tell that to people around the House, they’re shocked.”
His House Bill 1730 would increase the cap to $3 million annually. It would also extend its expiration date from the end of 2026 to the end of 2030.
Committee member Mark Sharp (D-Kansas City) was one of those who expressed support for the expansion.
The committee voted in favor of the increase, 6-0.