Missouri’s state auditor says a perk for businesses is costing the state hundreds of millions of dollars in potential revenue. 

A new report from State Auditor Scott Fitzpatrick finds the state’s “timely filing discount” for sales tax is the most generous in the nation. 

“As the members of the General Assembly work to craft a fiscally responsible budget and also consider replacing the income tax as the state’s primary revenue source with an expanded sales tax, they should read our audit report and consider our recommendation,” Fitzpatrick said in a release.

Missouri businesses kept $184 million of sales tax money last year just for turning it in on time every month. The auditor says if the state simply adopted a cap similar to Arkansas at $1,000 a month, the state would have collected an additional $112 million in revenue in a year.

“The timely discount does serve a meaningful purpose for the businesses who have to collect and remit these taxes, but a reasonable cap would better align the benefit to businesses of filing and remitting timely with the cost of doing so,” Fitzpatrick said.

The auditor argues the generous discount is no longer necessary because the law was written in 1963, when the tax filing was done by hand and was a time-consuming process. Software has lifted the burden, causing the cost of compliance to drop significantly.

The Missouri Department of Revenue received a “good” rating overall but the audit called for better reporting on the lost funds. Routine reports would show lawmakers the true price tag of the perk, helping them decide if that money should be spent on state services instead.