Letter: Not collecting Missouri sales tax would bust budget

Letter: Not collecting Missouri sales tax would bust budget

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Regarding “Public universities, state workers expected to feel brunt of $700 million cuts in Missouri budget” (April 28): Missouri collected $2 billion in sales tax during fiscal year 2018. That number will decrease in 2020 because of fewer sales. However, as a bankruptcy lawyer who has represented many retailers, it’s clear that more retailers than usual will collect sales tax and not turn it over to the state in this atmosphere. In normal times, some undercapitalized retailers default.

When the retail and restaurant industries reopen, many will have past-due amounts from earlier this year, and many may be cash short. More of them will use whatever comes in the door, including sales taxes, to stay open, not because they are crooks but because they will be desperate.

Added to this problem is the ubiquitous situation of car buyers who evade paying sales taxes by using printed and expired paper license plates.

There are solutions: First, because most retail and restaurant receipts are from credit card purchases, Missouri should require card processors to withhold sales taxes and remit directly to the state. Second, auto dealers should be required to collect sales taxes. To prevent them from defaulting, they should post surety bonds equal to a year’s estimated tax collection.

Unless Missouri makes businesses pay what is due, the deficit will be larger than projected, and the many local sales taxing districts will also find themselves short of cash.

Norman Pressman • Clayton

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