Missouri Department of Revenue

Lee's Summit JournalApril 16, 2014 

One of my jobs as a state senator is to make sure that constituents who are dealing with the Missouri government are treated fairly. We deal with dozens of cases a year, some of which we have shared in earlier Capitol Reports. I consider this task to be one of the most important as your state senator.

In the summer of 2012, I first learned of a situation regarding a gymnastic center in Lee’s Summit. The business, which among other things charges tuition for gymnastics classes for youth, has been operating for 20 years. We received a call from the owner who let us know he was being audited by the Department of Revenue, and that they were claiming he should have been collecting sales tax on his services. They are seeking three years of back taxes.

My staff immediately contacted DOR to find out what was going on. We were informed that, based on a 2009 court ruling, they were re-defining what constituted a “place of entertainment.” That conversation started a two-session-long battle to help our constituent, and those like him, avoid the potential of having to close a viable, growing business.

Last year, Sen. Bob Dixon, R-Springfield, who had a similar constituent complaint, filed legislation to clarify what was, and was not, a place of entertainment. While the bill did not make it to the legislative finish line, it started an important discussion in committee and on the floor. Senator Dixon filed the legislation again this year, Senate Bill 584, and it has passed the Senate and is in the House for similar consideration.

In addition, I filed two bills this year to help small business owners. The first, Senate Bill 662, requires DOR to notify businesses affected by any change in policy. If they fail to notify those businesses, DOR is prohibited from seeking back taxes. While we first started questioning the department about their decision almost two years ago, they only recently admitted that they had still not notified similar businesses just last week.

The second bill, Senate Bill 829, puts the burden of proof on the department in almost all tax disputes. It is unbelievable, but right now many large corporations and anyone collecting sales tax have to prove they are innocent if they are disputing a tax case.

Fortunately, I am not alone in questioning these DOR policies. This week, I was joined by several fellow lawmakers and by representatives of four statewide business groups at a press conference denouncing these DOR actions. Each told stories of how the department has twisted and misinterpreted laws and court rulings to harm small businesses in Missouri. The department is effectively putting its boot on the necks of small business owners.

You may remember that last year we had to deal with a big issue regarding DOR and your privacy. It seems as if the department is becoming more unreliable and unresponsive. I have asked Senator President Pro Tem Tom Dempsey to call for an investigation into their practices. The department has failed to testify at any of the hearings on related bills this year. It is time they were held accountable and made to answer our questions.


State Senator Will Kraus-R serves District Eight and is a resident of Lee’s Summit.

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