Proposals on license offices, tax penalties

One legislative proposal of particular local interest is HB 584, which would increase license office fees to help keep struggling license offices open.

In my time in the legislature, Bethany lost its license office for several weeks leaving residents of Harrison County no local location to get licenses renewed. Bethany now has a license office again. Maysville and Gallatin have both lost their license offices as well, so now residents of DeKalb and Daviess Counties must travel to Cameron for their license office business.

While I would prefer that license offices be up-funded by some of the existing fees rather than increasing fees, that idea is apparently not constitutional, and so the fee change is the next best idea being discussed in the legislature right now.

If implemented, HB 584 might help bring license offices back to towns like Maysville and Gallatin.

The second bill that may interest our area is HB 1094 concerning tax penalties.

Every pay period, our employers withhold a certain amount from our paychecks to cover our income taxes and remit that money to the federal and state governments. To know how much to take out, employers use withholding tables provided by the Department of Revenue to calculate the correct amount.

Ideally, the amount withheld throughout the year will equal the amount of income tax you owe, and so when you do your taxes you will find you neither owe a big amount nor get a big refund. The amount left to pay in by April 15 should be close to zero.

Due to recent changes in the tax code, it appears the withholding tables were inaccurate, and employers may not have been withholding as much as they should. This means that those who are used to getting a refund from over-withholding may owe instead to square up their tax bill.

Missourians will not be paying more in taxes – in fact the recent tax changes mean Missourians are keeping more of their hard-earned money. But if not enough was remitted by employers along the way, folks may have a tax bill on April 15.

HB 1094 addresses this “April surprise” by blocking any 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. This will provide some grace to taxpayers and not penalize them for an oversight on the part of the Department of Revenue, which is the state equivalent of the IRS.

Both HB 584 and HB 1094 have passed in the House, but will also need to be passed in the Senate to be given to the governor for his signature. Five weeks now remain in the legislative session to get that done.