Missouri Stops Sending Refund Checks to Taxpayers
The state will be required to begin paying interest at 6% on refunds not processed by August 15. "The state is experiencing serious financial problems, and we will send out the refunds just as soon as it's possible," said Missouri Budget Director Brian Long. State officials are not yet certain of when the remaining refund checks will be sent. "I don't think we'll wait till fall," was the best estimate Mr. Long could provide.
Other states are experiencing difficulty in processing refund checks as well. Illinois taxpayers are waiting an extra two weeks for their checks, and Alabama has temporarily suspended payment of corporate tax refunds.
States are discovering that tax collections this spring are lower than estimated while refunds are higher. Factors affecting the situation are a direct result of the economic recession. Many people worked fewer hours or at lower-paying jobs last year than the year before, and the sagging stock market resulted in lower than expected capital gains for 2001.