Many years ago I worked with a variety of food pantry folk and other friends to urge the Missouri Legislature to create the Food Pantry Tax Credit.
Like many of the state’s other “benevolent tax credits,” the pantry deduction from taxes owed gave a modest monetary thank you for people nice enough to contribute to the common good. The form remained pretty simple, requiring both the taxpayer and the pantry (or soup kitchen) to attest to the donation. By tax standards it was pretty easy to claim.
The credit always had a limits, per taxpayer and cumulative…
All claims will be held until after April 15 to determine if the total claimed exceeds $1,750,000. If claims exceed $1,750,000, the Department will apportion credits in an equal ratio among all valid returns filed.
[https://dor.mo.gov/tax-credits/fpt.html]
So, I thought it actually a good thing that again this year the credit was oversubscribed – meaning my wife and I didn’t get all we sought but pantries benefited.
And, another year with the Food Pantry Tax Credit being oversubscribed ought to be a signal that the legislature needs to raise the roof, perhaps to $3,000,000 a year?
Of course, when we sent in our 2021 Missouri tax forms we assumed we would get all the credit. That is the logical way to complete the form.
The ADJUSTMENT NOTICE, therefore, reducing our allowed deduction was not a surprise.
No, the surprise came in the boxes market Penalty and Interest.
The amounts were very small — $1.90 and 37¢, for a total of $2.27. It’s not the amount of the charges.
I take issue with the state assessing a penalty and interest on an amount unknowable when the taxes were filed. As mere taxpayers we had no way of projecting how much of the credit we could claim, meaning no way to estimate and pay the exact amount. ( We did pay every penny what our CPA deduced was our share of supporting state government.)
The problem, alas, is that a taxpayer has no defense or recourse against an unknowable – and I think inappropriate – bill from the Department of Revenue. The cost of appealing the $2.27 or the hassle of paying under protest isn’t cost effective.
Yet, pennies add-up. The state could (and probably does) harvest millions of dollars from honest taxpayers with these additions to the Adjustments.
Meanwhile, His Accidency the governor and his cronies want to lower the state’s income tax rate, saying Missouri doesn’t need all the money its collecting. I know educators, law enforcement folks, mental health professionals, state workers and many others who would disagree with the need to reduce state income.
So, maybe my $2.27 is a preemptive toll to help pay for future tax cuts?
Glenn Koenen
Photo by Timur Saglambilek on Pexels.