Our Opinion: Reasonable tax transparency for businesses

Advance notification is at the core of a tax transparency measure signed Monday by Gov. Jay Nixon.

The new law will require the state's tax collection agency, the Department of Revenue, to notify affected businesses of changes to sales tax rules.

Although that may seem a common courtesy, it hasn't been a regular practice.

According to the Missouri Chamber of Commerce and Industry, which supported the pro-business legislation, some businesses have been burdened by payment of back taxes they didn't know they were required to collect. As an example, the chamber said a rule change required dance and gymnastic studios to collect taxes, but the businesses were not notified of the change.

"Over the last two years, we've heard a number of firsthand accounts from businesses that were contemplating shutting down after they were targeted for violations of new sales tax policies that were never publicized," said Daniel P. Mehan, president and CEO of the state chamber. "With this new law, we are seeking transparency from the Missouri Department of Revenue. When the state educates businesses about tax law changes, we are going to see far fewer of these troubling instances where companies are forced to close due to unintentional violations."

Sen. Will Kraus, R-Lee's Summit and bill sponsor, said the law, which becomes effective Aug. 28, will end a practice he characterized as "notification by audit."

The legislation is not without costs to the state. Legislative researchers estimate this fiscal year the change will cost $425,394, largely for postage and the salary of a full-time employee.

The case can be made that businesses ought to be aware of applicable laws and regulations. But keeping current on an array of ever-increasing and ever-changing regulations can be burdensome, particularly for small businesses.

If we are serious - not just paying lip-service - about the value of small business to community economic development, fair notification is not too much to ask.

In a statement, Nixon called the law "fiscally responsible" and "business friendly."

It also requires fair and reasonable communication between a government that champions economic development and the private practitioners that sustain economic development.