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Galloway releases review of state tax credit programs

  

$2.9 billion in state tax credits have been redeemed in last five fiscal years; $2.8 billion remain authorized but not redeemed as of June 30, 2020

JEFFERSON CITY, Mo. — Missouri State Auditor Nicole Galloway today released a review of state tax credit programs as required by state law. The review compiles tax credit redemptions over the past five years and future obligations. Created by the General Assembly, and codified in state statutes, tax credits are generally a dollar-for-dollar reduction in the amount of state taxes otherwise due from taxpayers. During fiscal years 2017 through 2021, tax credits were authorized, issued, or redeemed through 58 different tax credit programs. Taxpayers redeemed $2.9 billion in tax credits during this period.

Total redemptions of tax credits have continued to increase, and redemptions in 2021 exceeded $600 million for only the second time in state history. The majority of tax credit redemptions over the past five years have reduced individual income and withholding taxes. Tax credit programs have reduced individual income tax collections by $1.148 billion from fiscal years 2017 through 2020.

The top five tax credit programs in terms of total redemptions during the review period were: Senior Citizen Property Tax, Missouri Works, Missouri Quality Jobs, Low Income Housing, and Historic Preservation. Some tax credits have extended carry forward provisions, which allow tax credits that have been authorized or issued in prior years to be redeemed over a long period of time. As of June 30, 2020, the amount of tax credits authorized but unredeemed was approximately $2.8 billion.

A complete copy of the report is available here.