JEFFERSON CITY, MO. -- State income taxpayers might get their refunds faster under a bill endorsed Tuesday morning by the Missouri House.
Last year, the Department of Revenue was forced to use $250 million federal stimulus to cover state income tax refunds. And that was only after a delay in processing those last checks. Under current law, the state can hold onto tax refunds for up to 120 days without paying interest.
"It is an obligation of the state to pay them interest for the same (reason) they expect taxpayers to pay (a penalty) when they don't pay promptly,” Rep. Stanley Cox, (R) Sedalia said.
Cox and others said the state should not be able to hold refund money any longer than it takes to process an income tax return. Salem republican Jason Smith has offered legislation to accelerate the interest-free deadline to just 45 days.
"The tax refund is overpayment of the tax dollars,” Smith said. “It's the Missouri citizen taxpayer's money. I sure hope the state can pay its bills. And one of its bills is, anytime the taxpayers pay too much to the government, we should refund that money in a prompt manner.”
Kansas, California and North Carolina all delayed tax refund checks last year because of cash-flow problems.
The revised deadline would apply to refunds for sales taxes, as well as both personal and corporate income taxes.
The house measure needs a final house vote before moving on to the senate.
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