$1.4 trillion difference in revenue collected from Pass Through Entities

By Sheila Harris [email protected]

Over $1 trillion disappeared from Missouri’s Annual Financial & Statistical Report for Fiscal Year 2024, which ended on June 30 of that year.

The 2024 total revenue collected from Pass Through Entities (out-of-state corporations who do business in Missouri) was reported as being $1,403,467,780,000 on the financial report for 2024. However, on the 2025 financial report, which also showed the previous year’s collected amount, the total shown as collected from Pass Through Entities for 2024 dropped to $7,421,000.

That’s a difference of $1,402,721,359,000. A difference of over $1.4 trillion, if put another way.

The discrepancy could reflect tax credits owed to Pass Through Entities, but that had not yet been applied, an area banker said.

A disclaimer by the DNR on the 2025 Report does state that the amounts previously reported for Fiscal Year 2024 had been revised to reflect updated information.

After the disappearance of over $1.4 trillion in the out-of-state business category on the DOR report, individual income taxes represented the highest source of revenue for the state, with over $9 billion.

Tax credits in the amount of $1.4 trillion to out-of-state businesses could be attributed, in part, to the enactment of a new Missouri tax credit law almost four years ago. The State and Local Tax Parity Act (SPA) Tax Credit was enacted through House Bill 2400 and signed into law by former Governor Mike Parson in August 2022.

According to Legal Clarity Missouri, Missouri’s SALT Parity Act allows a state and local tax work-around for S corporations and partnerships, including those from out of state who operate in Missouri. The complicated tax formula hinges on the rate of Missouri’s income tax for individuals. (Section 143.436 RSMo )

If Amendment 5 passes in the August 4 election, it will amend the state constitution to reduce the state individual income tax, based on revenue growth, until the tax is eliminated.

The Cassville Democrat emailed both the Missouri Department of Revenue (DOR) and State Auditor Scott Fitzpatrick’s office, requesting an explanation for the discrepancy on the DOR reports.

The DOR’s communications director replied by telephone, stating that an emailed reply would be forthcoming, but no reply has been received.

Trevor Fox, the communications director with the Auditor’s office, replied by email, stating that questions about the discrepancy had been referred to others in his office. They agreed, he said, that there was a discrepancy.

 “We’re not sure why [yet] though,” Fox said.