TO THE HONORABLE MEMBERS OF THE COMMITTEE

Thank you for the opportunity to testify. My name is Elias Tsapelas, and I’m the Director of State Budget and Fiscal Policy at the Show-Me Institute, a nonprofit, nonpartisan, Missouri-based think tank that advances sensible, well-researched, free-market solutions to state and local policy issues. The ideas presented here are my own and are offered in consideration of proposals that will affect tax credits in Missouri.

Senate Bill 1079 consolidates Missouri’s existing film and series production tax credit sub-caps into a single $16 million pool for both, leaving the state’s total commitment the same. The only substantive effect of the bill would be to give the Film Office more flexibility in how the same dollars are allocated. That flexibility does not address the fundamental problem with this program.

Current and Past Tax Credit Failures

Despite the Missouri film tax credit’s recent revival, our state has a long history with this troubling incentive. Until its sunset in 2013, Missouri’s previous iteration made promises similar to what supporters are touting today. Missouri’s own Tax Credit Review Commission recommended the credit be eliminated because it served too narrow an industry and failed to provide a positive return on investment.¹

Research confirms that pattern holds nationally. Film tax credits have not resulted in job growth, have not affected market share or industry output, and have produced only short-term wage gains for those already in the industry.² Credits in many states generated just cents on the dollar. As one Tax Foundation analyst notes, “non-favored activities and businesses remain on the hook to bear the full impact of the state’s tax code.”³

The Missouri Film Office has pointed to the number of projects approved and production spending in the state as evidence the program is working, but that is not the right measure for determining whether the program is a good investment for state taxpayers.⁴ The relevant question is how much the state receives back in tax revenue and broader economic activity—and by that measure, the research is consistent: film tax credits do not generate a positive return.

The Competitiveness Argument Doesn’t Hold

Supporters of SB 1079 argue that pooling the sub-caps will make Missouri more competitive for productions. Even setting aside the ROI question, that argument doesn’t hold.

Steven Conrad, the showrunner who created a new HBO series set in St. Louis and filmed it entirely in Atlanta, recently suggested that governments may not be well-served by chasing the film industry at all.⁵ His observation reflects a structural reality: Georgia has spent two decades building the studios, crews, soundstages, and production infrastructure that make large productions possible. Missouri has not. No reallocation of $16 million changes that.

Georgia’s own state auditor found that even Georgia’s fully developed, deeply established program returned just 10 cents to the state for every dollar of credit granted, producing a net revenue loss of $602 million in a single year.⁶ If one of the most mature film-incentive programs in the country cannot generate a positive return on investment, a program at a fraction of its scale operating in a state without comparable infrastructure has no prospect of doing so.

Targeted Credits Are Poor Economic Policy

Targeted economic development tax credits are just another way for lawmakers to pick winners and losers, a job that is better left to consumers in the market. When tax breaks are given to some, other taxpayers have to make up for the lost revenue. The impulse to do something to support an industry is understandable, but tax credits are a poor substitute for the conditions that make industries thrive organically. A dollar of film tax credits reduces state revenue by exactly the same amount as a dollar of direct appropriations—the difference is that credits bypass the appropriations process and receive less scrutiny.

Prioritize Tax Relief That Benefits All Missourians

Missouri is already a national leader in state spending in the name of economic development. Over the past few decades, Missouri has forgone billions in state tax revenue in favor of a host of narrow incentives that have consistently shown poor results. In FY2025 alone, Missouri redeemed more than $961 million in tax credits—nearly double the $521 million redeemed in 2010.⁷ The General Assembly is simultaneously weighing whether to eliminate the state income tax, a reform that would deliver broad economic benefits to every Missourian. The legislature should consider whether a growing tax credit portfolio is consistent with that goal. Expanding targeted credits that erode the income-tax base works against broad-based tax relief, and Missouri would be better served by pursuing the latter.

The film tax credit is a small program, but it exemplifies the approach to tax policy that makes comprehensive reform harder to achieve. Tax credit programs have not been successful in Missouri in the past, there is little evidence to suggest the film tax credit is succeeding now, and there is no reason to believe this program will perform differently under a restructured allocation. If increasing economic opportunity is the goal, the research is clear: Instead trying to manufacture more opportunities at the expense of taxpayers, lawmakers should provide broad-based tax relief to every Missourian.

NOTES

1. “Report of the Missouri Tax Credit Review Commission.” Missouri Tax Credit Review Commission. 2010; https://www.semissourian.com/files/tcrcfinalreport113010.pdf.
2. “Lights, camera and no action: How state film subsidies fail.” USC Press Release. August 18, 2016; https://pressroom.usc.edu/lights-camera-and-no-action-how-state-film-subsidies-fail.
3. Loughead, Katherine. “Illuminating the Hidden Costs of State Tax Incentives.” Tax Foundation. 2021; https://taxfoundation.org/state-tax-incentives-costs.
4. “Made-in-Missouri Film and TV Productions Spent $40.7 Million in 2025.” Missouri Department of Economic Development. February 2026; https://ded.mo.gov/press-room/made-missouri-film-and-tv-productions-spent-407-million-2025.
5. Neman, Daniel. “HBO’s DTF St. Louis has a dream cast, but it wasn’t shot here.” St. Louis Post-Dispatch. February 26, 2026; https://www.stltoday.com/life-entertainment/local/movies-tv/article_cfa2d34c-435a-40fd-9fa5-75933d716915.html.
6. “Impact of the Georgia Film Tax Credit.” Georgia Department of Audits and Accounts, Performance Audit Division. Report No. 18-03B. January 2020; https://www.audits.ga.gov/ReportSearch/download/23536.
7. “Fourth Quarter Tax Credit Report, Fiscal Year 2025.” Missouri Department of Revenue. 2025; https://dor.mo.gov/public-reports/documents/Fourth-Quarter-FY25-Tax-Credit-Report.pdf.

The post Senate Bill 1079: Film Tax Credits appeared first on Show-Me Institute.

TO THE HONORABLE MEMBERS OF THE COMMITTEE

Thank you for the opportunity to testify. My name is Elias Tsapelas, and I’m the Director of State Budget and Fiscal Policy at the Show-Me Institute, a nonprofit, nonpartisan, Missouri-based think tank that advances sensible, well-researched, free-market solutions to state and local policy issues. The ideas presented here are my own and are offered in consideration of proposals that will affect tax credits in Missouri.

House Bill 2142 consolidates Missouri’s existing film and series production tax credit sub-caps into a single $16 million pool for both, leaving the state’s total commitment the same. The only substantive effect of the bill would be to give the Film Office more flexibility in how the same dollars are allocated. That flexibility does not address the fundamental problem with this program.

Current and Past Tax Credit Failures

Despite the Missouri film tax credit’s recent revival, our state has a long history with this troubling incentive. Until its sunset in 2013, Missouri’s previous iteration made promises similar to what supporters are touting today. Missouri’s own Tax Credit Review Commission recommended the credit be eliminated because it served too narrow an industry and failed to provide a positive return on investment.¹

Research confirms that pattern holds nationally. Film tax credits have not resulted in job growth, have not affected market share or industry output, and have produced only short-term wage gains for those already in the industry.² Credits in many states generated just cents on the dollar. As one Tax Foundation analyst notes, “non-favored activities and businesses remain on the hook to bear the full impact of the state’s tax code.”³

The Missouri Film Office has pointed to the number of projects approved and production spending in the state as evidence the program is working, but that is not the right measure for determining whether the program is a good investment for state taxpayers.⁴ The relevant question is how much the state receives back in tax revenue and broader economic activity—and by that measure, the research is consistent: film tax credits do not generate a positive return.

The Competitiveness Argument Doesn’t Hold

Supporters of HB 2142 argue that pooling the sub-caps will make Missouri more competitive for productions. Even setting aside the ROI question, that argument doesn’t hold.

Steven Conrad, the showrunner who created a new HBO series set in St. Louis and filmed it entirely in Atlanta, recently suggested that governments may not be well-served by chasing the film industry at all.⁵ His observation reflects a structural reality: Georgia has spent two decades building the studios, crews, soundstages, and production infrastructure that make large productions possible. Missouri has not. No reallocation of $16 million changes that.

Georgia’s own state auditor found that even Georgia’s fully developed, deeply established program returned just 10 cents to the state for every dollar of credit granted, producing a net revenue loss of $602 million in a single year.⁶ If one of the most mature film-incentive programs in the country cannot generate a positive return on investment, a program at a fraction of its scale operating in a state without comparable infrastructure has no prospect of doing so.

Targeted Credits Are Poor Economic Policy

Targeted economic development tax credits are just another way for lawmakers to pick winners and losers, a job that is better left to consumers in the market. When tax breaks are given to some, other taxpayers have to make up for the lost revenue. The impulse to do something to support an industry is understandable, but tax credits are a poor substitute for the conditions that make industries thrive organically. A dollar of film tax credits reduces state revenue by exactly the same amount as a dollar of direct appropriations—the difference is that credits bypass the appropriations process and receive less scrutiny.

Prioritize Tax Relief That Benefits All Missourians

Missouri is already a national leader in state spending in the name of economic development. Over the past few decades, Missouri has forgone billions in state tax revenue in favor of a host of narrow incentives that have consistently shown poor results. In FY2025 alone, Missouri redeemed more than $961 million in tax credits—nearly double the $521 million redeemed in 2010.⁷ The General Assembly is simultaneously weighing whether to eliminate the state income tax, a reform that would deliver broad economic benefits to every Missourian. The legislature should consider whether a growing tax credit portfolio is consistent with that goal. Expanding targeted credits that erode the income-tax base works against broad-based tax relief, and Missouri would be better served by pursuing the latter.

The film tax credit is a small program, but it exemplifies the approach to tax policy that makes comprehensive reform harder to achieve. Tax credit programs have not been successful in Missouri in the past, there is little evidence to suggest the film tax credit is succeeding now, and there is no reason to believe this program will perform differently under a restructured allocation. If increasing economic opportunity is the goal, the research is clear: Instead trying to manufacture more opportunities at the expense of taxpayers, lawmakers should provide broad-based tax relief to every Missourian.

NOTES

1. “Report of the Missouri Tax Credit Review Commission.” Missouri Tax Credit Review Commission. 2010; https://www.semissourian.com/files/tcrcfinalreport113010.pdf.
2. “Lights, camera and no action: How state film subsidies fail.” USC Press Release. August 18, 2016; https://pressroom.usc.edu/lights-camera-and-no-action-how-state-film-subsidies-fail.
3. Loughead, Katherine. “Illuminating the Hidden Costs of State Tax Incentives.” Tax Foundation. 2021; https://taxfoundation.org/state-tax-incentives-costs.
4. “Made-in-Missouri Film and TV Productions Spent $40.7 Million in 2025.” Missouri Department of Economic Development. February 2026; https://ded.mo.gov/press-room/made-missouri-film-and-tv-productions-spent-407-million-2025.
5. Neman, Daniel. “HBO’s DTF St. Louis has a dream cast, but it wasn’t shot here.” St. Louis Post-Dispatch. February 26, 2026; https://www.stltoday.com/life-entertainment/local/movies-tv/article_cfa2d34c-435a-40fd-9fa5-75933d716915.html.
6. “Impact of the Georgia Film Tax Credit.” Georgia Department of Audits and Accounts, Performance Audit Division. Report No. 18-03B. January 2020; https://www.audits.ga.gov/ReportSearch/download/23536.
7. “Fourth Quarter Tax Credit Report, Fiscal Year 2025.” Missouri Department of Revenue. 2025; https://dor.mo.gov/public-reports/documents/Fourth-Quarter-FY25-Tax-Credit-Report.pdf.

The post House Bill 2142: Film Tax Credits appeared first on Show-Me Institute.

TO THE HONORABLE MEMBERS OF THE COMMITTEE

Thank you for the opportunity to testify. My name is Elias Tsapelas, and I’m the Director of State Budget and Fiscal Policy at the Show-Me Institute, a nonprofit, nonpartisan, Missouri-based think tank that advances sensible, well-researched, free-market solutions to state and local policy issues. The ideas presented here are my own and are offered in consideration of proposals that will affect tax credits in Missouri.

House Bill 2058 consolidates Missouri’s existing film and series production tax credit sub-caps into a single $16 million pool for both, leaving the state’s total commitment the same. The only substantive effect of the bill would be to give the Film Office more flexibility in how the same dollars are allocated. That flexibility does not address the fundamental problem with this program.

Current and Past Tax Credit Failures

Despite the Missouri film tax credit’s recent revival, our state has a long history with this troubling incentive. Until its sunset in 2013, Missouri’s previous iteration made promises similar to what supporters are touting today. Missouri’s own Tax Credit Review Commission recommended the credit be eliminated because it served too narrow an industry and failed to provide a positive return on investment.¹

Research confirms that pattern holds nationally. Film tax credits have not resulted in job growth, have not affected market share or industry output, and have produced only short-term wage gains for those already in the industry.² Credits in many states generated just cents on the dollar. As one Tax Foundation analyst notes, “non-favored activities and businesses remain on the hook to bear the full impact of the state’s tax code.”³

The Missouri Film Office has pointed to the number of projects approved and production spending in the state as evidence the program is working, but that is not the right measure for determining whether the program is a good investment for state taxpayers.⁴ The relevant question is how much the state receives back in tax revenue and broader economic activity—and by that measure, the research is consistent: film tax credits do not generate a positive return.

The Competitiveness Argument Doesn’t Hold

Supporters of HB 2058 argue that pooling the sub-caps will make Missouri more competitive for productions. Even setting aside the ROI question, that argument doesn’t hold.

Steven Conrad, the showrunner who created a new HBO series set in St. Louis and filmed it entirely in Atlanta, recently suggested that governments may not be well-served by chasing the film industry at all.⁵ His observation reflects a structural reality: Georgia has spent two decades building the studios, crews, soundstages, and production infrastructure that make large productions possible. Missouri has not. No reallocation of $16 million changes that.

Georgia’s own state auditor found that even Georgia’s fully developed, deeply established program returned just 10 cents to the state for every dollar of credit granted, producing a net revenue loss of $602 million in a single year.⁶ If one of the most mature film-incentive programs in the country cannot generate a positive return on investment, a program at a fraction of its scale operating in a state without comparable infrastructure has no prospect of doing so.

Targeted Credits Are Poor Economic Policy

Targeted economic development tax credits are just another way for lawmakers to pick winners and losers, a job that is better left to consumers in the market. When tax breaks are given to some, other taxpayers have to make up for the lost revenue. The impulse to do something to support an industry is understandable, but tax credits are a poor substitute for the conditions that make industries thrive organically. A dollar of film tax credits reduces state revenue by exactly the same amount as a dollar of direct appropriations—the difference is that credits bypass the appropriations process and receive less scrutiny.

Prioritize Tax Relief That Benefits All Missourians

Missouri is already a national leader in state spending in the name of economic development. Over the past few decades, Missouri has forgone billions in state tax revenue in favor of a host of narrow incentives that have consistently shown poor results. In FY2025 alone, Missouri redeemed more than $961 million in tax credits—nearly double the $521 million redeemed in 2010.⁷ The General Assembly is simultaneously weighing whether to eliminate the state income tax, a reform that would deliver broad economic benefits to every Missourian. The legislature should consider whether a growing tax credit portfolio is consistent with that goal. Expanding targeted credits that erode the income-tax base works against broad-based tax relief, and Missouri would be better served by pursuing the latter.

The film tax credit is a small program, but it exemplifies the approach to tax policy that makes comprehensive reform harder to achieve. Tax credit programs have not been successful in Missouri in the past, there is little evidence to suggest the film tax credit is succeeding now, and there is no reason to believe this program will perform differently under a restructured allocation. If increasing economic opportunity is the goal, the research is clear: Instead trying to manufacture more opportunities at the expense of taxpayers, lawmakers should provide broad-based tax relief to every Missourian.

NOTES

1. “Report of the Missouri Tax Credit Review Commission.” Missouri Tax Credit Review Commission. 2010; https://www.semissourian.com/files/tcrcfinalreport113010.pdf.
2. “Lights, camera and no action: How state film subsidies fail.” USC Press Release. August 18, 2016; https://pressroom.usc.edu/lights-camera-and-no-action-how-state-film-subsidies-fail.
3. Loughead, Katherine. “Illuminating the Hidden Costs of State Tax Incentives.” Tax Foundation. 2021; https://taxfoundation.org/state-tax-incentives-costs.
4. “Made-in-Missouri Film and TV Productions Spent $40.7 Million in 2025.” Missouri Department of Economic Development. February 2026; https://ded.mo.gov/press-room/made-missouri-film-and-tv-productions-spent-407-million-2025.
5. Neman, Daniel. “HBO’s DTF St. Louis has a dream cast, but it wasn’t shot here.” St. Louis Post-Dispatch. February 26, 2026; https://www.stltoday.com/life-entertainment/local/movies-tv/article_cfa2d34c-435a-40fd-9fa5-75933d716915.html.
6. “Impact of the Georgia Film Tax Credit.” Georgia Department of Audits and Accounts, Performance Audit Division. Report No. 18-03B. January 2020; https://www.audits.ga.gov/ReportSearch/download/23536.
7. “Fourth Quarter Tax Credit Report, Fiscal Year 2025.” Missouri Department of Revenue. 2025; https://dor.mo.gov/public-reports/documents/Fourth-Quarter-FY25-Tax-Credit-Report.pdf.

The post House Bill 2058: Film Tax Credits appeared first on Show-Me Institute.

That’s why the latest version of Missouri Department of Revenue’s sales and use tax mapping tool is so welcome. A story by the eMissourian is a testament to precisely how I would hope the site would be used by the media and the public:

A purchase in downtown Washington comes with an 8.85 percent sales tax, which includes a 2 percent city sales tax and a 0.375 percent tax for the Washington Area Ambulance District.

Someone making the same purchase in downtown Union would have to pay 9.475 percent in sales tax. While Union has the same 2 percent city sales tax as Washington, consumers also pay a 0.5 ambulance district tax and a 0.5 percent tax for the Union Fire Protection District. St. Clair has the same 9.475 percent sales tax rate, with its fire and ambulance districts both having half cent sales taxes.

While Pacific charges a higher 2.5 percent city sales tax, it has the same overall 9.475 percent sales tax rate because no fire sales tax is shown.

You can find the sales and use taxes in your jurisdiction, and any Missouri jurisdiction, here.

It’s worth noting that while a number of articles this month have referenced the map as “new,” as my colleague Elias Tsapelas might note, it’d be more accurate to characterize it as “improved.” House Bill 1858 in 2018 and Senate Bill 153 in 2021 both helped lead to the new initiative, and perhaps serendipitously those local rate transparency initiatives also coincided with both the Show-Me Checkbook spending transparency projects and parallel spending transparency initiatives by the state treasurer and the state office of administration.

In other words, the transparency initiatives of the late 2010s are starting to bear fruit here in the early 2020s, so while some features on the interactive map may be “new,” the ideas aren’t. Of course, the state can always do more to promote transparency, such as requiring spending transparency from local governments and curricular transparency from schools and districts. But for what this tax map narrowly seeks to do, it does a good job of it.

The post State-Created Tax Map a Solid Tool for Oversight of Local Sales and Use Taxes appeared first on Show-Me Institute.

As I’ve written in the past, I’m not a fan of the refund scheme. The bill that created the refund raised the state’s gas tax by 2.5 cents per year for five years, but avoided a public vote by offering a path for Missourians to get back what they paid in new taxes at the end of the state’s fiscal year. The catch is that you need to keep all your gas receipts for the year and file a claim with the state’s department of revenue between July 1st and September 30th to be eligible for a refund.

If the refund were too easy to claim, the gas tax hike approved by legislators in 2021 would never raise much money for state roads. But our elected officials were willing to bet that taxpayers wouldn’t want to go through all the hassle to get a meager refund, and based on the refunds claimed last year, they were correct. Very few taxpayers claimed refunds last year, but it was also the least lucrative year for claiming a refund (only 2.5 cents per gallon was eligible for refund).

This year, the refund has doubled up to 5 cents per gallon, which means that drivers that fill up a 12-gallon tank every week for a year would receive around $30 back. While the total is still not a lot, it’s more than before, and the department of revenue now has an online portal available for filing claims, which is supposed to make the process a bit easier.

Of course, I would have rather Missouri’s legislature make the process easier—something like what was proposed in the bill I discussed here—or gotten rid of the tax hike altogether. But with prices up all across our economy, every little bit helps. Personally, I did not file for a refund last year, but I wish I had. This year, I did a better job of keeping track of my receipts and will be submitting my claim once the window opens. I hope many other Missourians join me in doing the same.

The post Second Time’s the Charm? appeared first on Show-Me Institute.

If enacted, House Bill (HB) 519 would require the state’s department of revenue to develop a mobile application for claiming gas tax refunds, which is what I suggested the state do back before the program began. The idea of keeping track of gas receipts for a whole year to fill out a form and mail it to Jefferson City always seemed like more work than the refund would likely be worth to most Missourians. That’s why I think having an easy process for registering gas purchases at the point of sale and submitting those receipts through an app for refunds would be a real game changer.

Additionally, the bill would get rid of the arbitrary window for filing rebates. As much as I’d like to think most Missourians enjoy following the state’s budget along with me every year, I don’t think the end of the state’s fiscal year (which is the current deadline for filing gas tax refunds) represents an obvious time for most to be filing tax documents. Expanding the window to allow gas receipt submissions through the app all year, as well as when individuals file their taxes in April, would likely make things much more convenient for those interested in claiming a refund.

Finally, the bill allows taxpayers who don’t want to mess with tracking gas receipts to claim a “standard refund,” which will offer a specified amount as a credit against the individual’s income tax liability. For the 2023 tax year, the standard refund would be $30. But by 2026 and every year after, when the gas tax hike is fully ramped up, the refund would be $75.

As I explained previously, if the legislature really wasn’t trying to raise taxes on Missourians without their input, the refund portion of the gas tax hike should be simple enough that most taxpayers feel they can reasonably take advantage of the refund opportunity. Based on the data from the refund’s first full year, I’d say that was not the case. While HB 519 is not perfect, I think it goes a long way toward demonstrating the state’s commitment to the law enacted by the legislature. I, for one, would appreciate a better way to reclaim my tax dollars.

The post A Better Way to Pay? appeared first on Show-Me Institute.

Recently, the Missouri Department of Revenue released data showing that in the refund program’s first year, fewer than 17,000 Missouri taxpayers decided to claim a refund. This amounted to less than $500,000 being returned to taxpayers.

Back when the gas tax hike was being debated, I repeatedly sounded the alarm about a few of the bill’s provisions (read more about the concerns here). The gist of the bill was that the state’s gas tax would increase by 2.5 cents per year for five years, but Missourians could get a refund for the amount of the new tax they paid.

Typically, Missouri’s constitution requires tax increases to receive voter approval before they can be enacted. But this refund provision helped convince lawmakers that their legislation wasn’t necessarily a “tax increase” on Missourians, thus giving them the ability to sidestep this pesky provision. According to the bill’s fiscal note, even the department of revenue’s “low-refund” estimate suggested that at least 15% of all gallons purchased would receive refund claims. If this were true, this first year of refunds would have totaled more than $11 million. Instead, only about 4% of the low estimate was claimed.

At the time, I remarked how skeptical I was that many Missourians would claim these refunds. I thought that unless the department of revenue made it easier for taxpayers to file claims, the amount of money eligible for refund would likely be too small to convince Missourians to bother. The process is tedious and cumbersome—in order to file for a refund, you must keep all the gas receipts that you are seeking reimbursement for, fill out a spreadsheet with information on those receipts, and the request must be completed in a narrow time window after the fiscal year ends. While the current sample size for refund claims is small, the ridiculously low amount of dollars returned leads me to believe that this prediction turned out to be correct.

To be fair, this is only the first year of the multi-year effort, and as the gas tax continues to rise over the next few years, the value of the refund to taxpayers will increase. But it’s also fair to say the participation in year one should be worrying to anyone who believed the bill was not an effort to significantly raise taxes on Missourians without their input.

The post Tax Refund: Failure to Launch appeared first on Show-Me Institute.

Like most special taxing districts in Missouri, the Buc-ee’s CID will use public funds for private infrastructure. The new sales tax rate at Buc-ee’s will only benefit the company itself—the tax dollars collected at the gas station will mostly go toward constructing the building, access road, and parking lot. From its first day of operation, corporate welfare will support the business one Springfield resident referred to as “a beaver Walmart.”

Most residents of Springfield will have no say in this matter. The city drew the boundaries of the CID in such a way that all voters are excluded—only the city council got to vote on this. Show-Me Institute Director of Municipal Policy David Stokes called this “tax gerrymandering” in his testimony on this issue. In addition, four out of the five members of the Buc-ee’s CID board are listed as “Owner Representatives,” leaving only one seat for a citizen to provide a public perspective. Even once the CID is in effect, most of Buc-ee’s customers will likely have no idea about the extra hit to their wallets, since the CID Act doesn’t require any posting of added sales taxes.

Years of writing and research from Institute analysts on CIDs prove that proposals such as these are nothing new. Private developers use the public’s money to subsidize corporate interests with almost no public input. This process with special taxing districts has played out countless times before, both in Greene County and around our great state. You can see for yourself just how widespread CIDs are in Missouri by following the link to this interactive map from the Missouri Department of Revenue. Hopefully Springfield, and cities across the state, will soon learn that this isn’t a mistake worth repeating.

The post More of the Same in Springfield’s New Buc-ee’s CID appeared first on Show-Me Institute.

What are they? Approved in House Bill (HB) 2090 with funding included in the budget, the rebates are being issued as non-refundable income tax credits for the 2021 tax year. Individual filers are eligible to receive a credit of up to $500, and couples who file jointly can receive up to $1,000.

Who will get them? There are two major criteria for determining who will receive the income tax rebate. First, the rebate is a non-refundable credit, which means recipients must have paid income taxes in 2021 to qualify to receive any rebate. Second, the legislature placed an income cap on the rebate. For individuals, the cap is $150,000, and for those filing jointly, the cap is $300,000. If you earned more than the cap in 2021, you will not qualify for the rebate.

How much will they be? Perhaps the most confusing part of the legislature’s plan is determining how much each taxpayer will receive. Since it’s a non-refundable credit, a recipient can only receive up to the amount they paid in state income taxes in 2021, and no more. So, if you paid $50 in state income taxes, your rebate would only be $50. But for individuals who paid around $800 in state income tax, the maximum they could receive is $500.

One complicating factor here is that the legislature set aside exactly $500 million to pay for these rebates. While that sounds like a lot of money, the spending plan is structured in such a way that if Missouri’s Department of Revenue (DOR) determines that more people will qualify for the $500/$1,000 credit than can be paid for with $500 million, the department is authorized to lower the rebate payments to accommodate paying all those who qualify for the maximum rebate the same amount. Preliminary estimates suggest that this downward adjustment in rebates is extremely likely and may result in maximum rebates as low as somewhere in the $300 range, but we won’t know the exact number until DOR completes its analysis of the state’s 2021 tax filings.

When will we get them? While the ultimate date remains uncertain, I’d recommend taxpayers start checking their bank accounts and/or mailboxes in late 2022 for the money. Because of the provision allowing the size of the rebates to be lowered, the DOR will need to finish processing all 2021 filings, which can’t occur until after the tax filing extension deadline of October 17th. During debate on the bill, one legislator expressed wishful thinking that the department would be able to complete the process by the end of the calendar year. The money in the budget for the rebates is approved through June 30, 2023, so the rebates will at least be distributed by then.

Taxpayers are always going to be better spenders of their tax dollars than the government, and I’m glad the legislature decided to give some money back this year. But as is often the case with the government and rebates, the process of getting your money back can be quite complicated. For now, when someone asks if they’ll be receiving $500 in tax rebates, the best I can do is answer “Maybe.”

The post Are $500 Tax Rebates on the Way? appeared first on Show-Me Institute.

The state’s department of revenue previously determined that for the smallest CIDs—CIDs that only have a few parcels and property owners—releasing tax information is the same as releasing an individual’s personal tax information. So, as you can see in this report on CIDs from the state auditor, certain CIDs have their information redacted, as if secret details from the Gulf of Tonkin are buried in Missouri CID reports or something.

Senate Bill 1066 has been introduced to address this issue and clarify that all CID revenues, which, if I didn’t make this clear enough the first time, are all public tax dollars, can be collected and shared by various state agencies. This is a good bill for government transparency, something that has long been important to the Show-Me Institute.

The post A Needed Improvement to CID Laws appeared first on Show-Me Institute.

Click here to view the report.

The post An Updated Look at Tax-Increment Financing appeared first on Show-Me Institute.

Click here to view the report.

The post An Updated Look at Tax-Increment Financing appeared first on Show-Me Institute.

Missourians interested in getting a gas tax refund should start saving their receipts immediately. Then, sometime between July 1 and September 30 of 2022, those seeking a refund will need to use the Missouri Department of Revenue (DOR) website to start the refund claiming process. Each claim will require:

• The vehicle identification number of the vehicle into which the fuel was delivered;
• The date of the fuel sale;
• Names and addresses of the purchaser and seller;
• The number of gallons purchased; and
• The number of gallons purchased and charged Missouri fuel tax.

As of now, Missouri’s DOR hopes to have a new online system ready to allow taxpayers to file their refund claims electronically, but if it’s not ready, refund seekers will likely need to complete a slew of paper forms. Refund seekers who have their claims accepted should expect to receive their refund within 45 days. And while the claims will not initially require the submission of receipts, DOR may ask for them. In addition, the DOR stated receipts should be kept for three years for good measure.

Keep in mind that only the new 2.5 cent gas tax will be eligible for a refund. So, if for example, you purchase 100 gallons of fuel before next July, you would need to keep all your receipts until then (then another three years after), submit the required information in the prescribed three-month claim window, and then hopefully receive a check for $2.50 a month and a half later.

It remains to be seen how many Missourians will decide to take the state up on its offer, but the amount of effort required for such a meager return makes me skeptical many will follow through. Of course, if the state really wanted to make it easy for Missourians to claim refunds, it would have created an app to allow taxpayers to file claims immediately after purchase. But just like many mail-in rebate schemes, the program doesn’t seem designed to encourage people to actually claim the refund.

The post Missouri’s New Gas Tax Hassle appeared first on Show-Me Institute.

Since moving to Missouri, I’ve (reluctantly) become accustomed to high sales tax rates that vary from city to city, and even from street to street. Special taxing districts, political subdivisions that can impose taxes, are often to blame for these high sales tax rates, as they add additional taxes on top of state, county, and city taxes. As we work through this economic downturn, many will feel the burden of these high sales taxes.

The chart below shows the highest general sales tax rates in select cities according to Missouri’s Department of Revenue. As you can see, general sales taxes can get pretty high all over the state, peaking at 11.679% in several areas of St. Louis City (specific sales taxes, such as hotel room rates, can get even higher). Even in places with smaller populations like Joplin, there are enough special taxing districts to push sales tax rates up to nearly double digits.

With little oversight and a flawed implementation system, special taxing districts have taken over Missouri. While these districts have been a growing problem for years, the poor state of the economy underscores how little we can afford more special taxing districts right now. Isn’t it time for Missouri to stop taking money out of the pockets of regular citizens and giving it away to wealthy developers?

The post The Burden of Special Taxing Districts appeared first on Show-Me Institute.

But even if these inflated jobs claims were accurate, would they be worth celebrating?

The state of Missouri publishes an annual report cataloging every existing TIF project. While the job projection numbers are squishy (as mentioned above), we can still compare the promised benefits with reported reality.

The spike in the graph at the top of this post could be attributed to a larger number of projects granted TIF benefits in 2015. The Missouri Department of Revenue has not responded for comment on how the numbers are calculated. However, even without that blip, the highest number of claimed jobs in any of the six years has not reached the lowest number of promised jobs.

Even though some projects meet or exceed projections, most do not. In all, the job shortfall from these six years is over half a million jobs, counting promised new and retained jobs.

Further, taxpayers are on the hook for almost a quarter of the total costs for these projects:

Source: Missouri Department of Revenue Tax Increment Financing in Missouri reports, 2013-2018. Table created by author.

If these projects routinely produce fewer jobs than expected at a large expense to the taxpayer, what is the public benefit? We have reported several cases of companies using TIF for private benefit, and this appears to be a consistent trend. In many cases, for up to 23 years, developers in a TIF district receive a refund of some portion of the local sales taxes, utility taxes, and earnings taxes (if applicable)  generated by the project and only pay property taxes on the value of their property before the improvement was made.

While the public return may be questionable, the private benefit seems clear. TIF-related property values came a little shy of tripling in value between 2013 and 2018. What business would not want its property to increase in value, especially when it has received a 23-year tax abatement?

People with good intentions can differ on economic development policy, but it should be plain to everyone that Missouri’s current TIF policy isn’t working.

The post Theoretical Jobs appeared first on Show-Me Institute.

The sales tax rate in St. Louis is now one of the highest in the nation, only behind places like Chicago and Seattle. Currently, the base sales tax rate in the City of St. Louis sits at 9.679%. So, when you shop, you’re paying nearly 10% extra in taxes, and when you shop in one of the many areas with overlapping special taxing districts, you’re paying close to 12%. The rate is high relative to other cities, and it is high absolutely—it is pretty darn expensive to spend your own money in the Arch City.

The chart below depicts the base sales tax rate in St. Louis over the past 20 years. Slowly and steadily (and sometimes in quick bursts), it has been on the rise.

Source: Missouri Department of Revenue, Sales/Use Tax Rate Tables

Recent increases are due to special sales taxes for additional public safety funding and expanded economic development initiatives (like the north–south MetroLink expansion, which is unlikely to spur any development).

As I’ve written before, with each increase in the sales tax rate, policymakers will have fewer and fewer chances to go to taxpayers for projects that truly need funding. St. Louis may soon reach a point where the public is simply unwilling to cough up more of its money, however pressing the public need. Some residents and businesses may just call it quits and move elsewhere.

Moreover, we should all ask ourselves whether we’re getting the government we’re paying for. When the city has basic infrastructure woes (you should see the road I drive on every day for work), has trouble keeping refuse trucks running, and seems most occupied with giving away subsidies, it is hard to believe St. Louis government is worth nearly 10 cents on the dollar (in addition to the numerous other taxes it levies). 

Policymakers, like the rest of us, could always use extra cash. But there is a point at which we must make do with what we have. St. Louis officials should begin tightening their belts instead of asking for more, just like the average taxpayer must.

The post St. Louis’s Ridiculously High Sales Taxes appeared first on Show-Me Institute.

Every quarter, the Missouri Department of Revenue releases sales tax rates for all jurisdictions across the state. Because of the growing number of special taxing districts, such as community improvement districts (CID) and transportation development districts (TDD), sales tax rates have been shooting through the roof.

Data for the latest quarter (July-September) pegs Missouri’s average sales tax rate at 7.71%. While that doesn’t sound particularly high, it is important to note two things. First, at this time in 2017, the state average rate was 7.42%. For a statewide average, that is a significant jump for such a short period of time.

Source: Missouri Department of Revenue, Sales/Use Tax Rate Tables, numerous years

Second, these figures represent averages: many sales tax jurisdictions have rates higher than even 10% or 11%. For example, in Kansas City where the streetcar TDD overlaps with the Convention Hotel and Performing Arts CIDs, the total sales tax rate is 11.6%. In St. Louis the rates reach 11.68% in places like Ballpark Village and Washington Avenue. What the statewide average does a good job of tracking is the impact of additional special taxes in the hundreds of CIDs and TDDs across the state. If the addition of CIDs and TDDscauses such significant jumps in the tax climate of the state as a whole, that means these taxing districts are not just nickel and diming taxpayers—they are significantly changing Missouri’s tax climate.

In a recent paper, Patrick Tuohey and I discuss reforms to help curb the growth of special taxing districts. Some reforms have proposed a sales tax rate ceiling, and while they would help, they wouldn’t prevent taxpayer abuse in areas with lower sales tax rates than the proposed ceiling. This much is clear: the longer policymakers take to address the state’s out-of-control sales tax problem, the worse it is going to be. The time to act is now. 

The post Up and Up: Sales Taxes Across the State appeared first on Show-Me Institute.

Each year, Missourians pay millions of dollars in sales taxes they often don’t know exist. My colleagues have written often about the problems with these special taxing districts. Many are created without a public vote, the projects often have questionable public benefits, and they usually lack oversight. It was welcome news that consumers were going to have a resource that illustrates whether a special sales tax will be collected any place they wish to shop. The bad news is the map is incapable of showing the cumulative sales tax rate for those locations.

To find the total sales tax burden for a specific address, you’ll need to go to another website. Missouri has more than 2,000 sales tax jurisdictions, and at least 1,400 of those are considered “special.” The remaining jurisdictions are made up of Missouri’s cities and counties who have their own sales and use taxes, but none of those are included on the map.

The map, as a whole, does paint a picture of just how overgrown the state’s special taxing districts have become. Nonetheless, you would think the Show-Me State could create a map that allows taxpayers to accurately determine their cumulative sales tax burden no matter where they are making purchases in the state without having to input a specific address.

See the Department of Revenue’s new map here.

The post Special Taxing District Map Now Available appeared first on Show-Me Institute.

Over the past eight or so years, the number of distinct sales tax jurisdictions in Missouri has grown by more than 9 percent—a total of 199 new jurisdictions created. This growth is caused by several factors, but mostly by new and overlapping special taxing districts, such as ambulance districts, levee districts, and, most prominently, transportation development districts (TDDs) and community improvement districts (CIDs). These districts are formed to collect sales and other taxes to fund various improvements and services. Unfortunately, TDDs and CIDs usually just help pad developers’ bottom lines.

Source: Missouri Department of Revenue, Sales/Use Tax Rate Tables, numerous years.

As the figure above shows, with the increase in sales tax jurisdictions comes an increase in the average sales tax rate. This means that as more and more jurisdictions come on the scene, taxpayers cough up more and more money.

However, just because the average sales tax rate has been on the rise, it doesn’t necessarily mean all Missourians are paying more in sales taxes. As noted above, the driving force behind the rate increases has been the creation and overlapping of special taxing districts, which usually encompass relatively limited geographic areas. And although the TDDs and CIDs that are driving the rate growth are all over the state, about two-thirds are in the St. Louis and Kansas City metro areas, where much of the state’s population lives. So, overall, even if some Missourians are not significantly affected by the recent rate increases, many are.

Unfortunately, as things stand there is little taxpayers can do to curb the state’s sales tax rate growth. That’s because many if not most TDD and CID taxes can be established without the approval of the general public. These districts can be formed by property owners—often developers—meaning the taxpaying public has no say in whether the rate hikes become law. Real reform would have to come in the form of significant changes to the laws governing TDDs and CIDs. So, as the new year gets going and the legislature meets in Jefferson City, lawmakers keen on lowering (regressive) taxes should take some time to think about redesigning the laws that allow these districts to be established.

The post New Year, New Sales Taxes appeared first on Show-Me Institute.

Thankfully, reforms are being passed and Missouri’s shadowy sales tax mosaic may soon come into view. HB 1858 was signed into law this past Friday. The law will require all political subdivisions (such as counties, cities, TDDs, and CIDs) to submit maps of their boundaries to the state Department of Revenue. The result will be a clear and concise presentation of the myriad sales tax jurisdictions littering our state. The map should be available by July 2019.

A map of all the jurisdictions collecting sales taxes may not sound like a big deal, but it is. While it’s easy to know what county or town you’re in, it hasn’t been so easy to figure out whether you’re shopping in one or more TDDs or CIDs. These districts are required to present maps of their boundaries only when petitioning to form, and so it is often nearly impossible to figure where they are exactly later down the road. They can also be as small as a single shopping center or district! In short, you could have been paying an extra two percent in sales taxes and had no way to find out where to shop to avoid it (other than an expensive sort of trial and error).

While HB 1858 is a win for taxpayers and transparency advocates, there is still a lot of work ahead of us. TDDs and CIDs continue to be used for projects with questionable public benefits, have poor reporting standards, and operate with little to no public scrutiny. Missouri taxpayers deserve accountable, transparent government for the public good, and it’s time to give it to them.

The post A Fine First Step in the Right Direction for Special Taxing District Reform appeared first on Show-Me Institute.