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Mon September 2, 2013
Analysis: Huge Mo. tax cut largely hypothetical
Governor Jay Nixon says a clause in the income tax cut bill he vetoed could have triggered a $1.2 billion run on the state treasury because the cuts could apply retroactively to the last 3 years.
Attorney General Chris Koster agreed with Nixon's legal analysis this past week, as Republicans consider overriding the veto. But the dollar amount projection remains largely hypothetical.
The Missouri bill would trigger a one-half of a percent reduction in state income tax rates if the federal government enacts a measure making it easier for states to collect online sales taxes. That bill has stalled in the U.S. House.
But if that federal bill passed, and Missouri Republicans overrode the veto of the state bill, all of Missouri's roughly 2.8 million income taxpayers would have to amend three years of tax returns for Nixon's projections to hit the mark in a single year.
Courts also likely would have to determine whether the retroactive tax refund is legal. Missouri Republicans could override Nixon’s veto in next week’s veto session.