Taxation Law

CCS#2/HCS/SCS/SB 9 – Allows University of Missouri extension councils, except for any council located in St. Louis County, to form extension districts made up of cooperating counties for the purpose of funding extension programming.  

The governing body of a district may submit a question to the voters of the district to institute a property tax levy in the district’s counties. In a single–county district, the property tax levy will be imposed if a majority of the voters vote in favor of it. In a consolidated district, the property tax levy will be imposed if a majority of the voters in each county in the district approves it. If one county does not approve it, the council in that county may withdraw from the district by a majority vote; upon such withdrawal, the district would be made up of the remaining counties and the tax would be imposed on them. However, if the county that did not approve the tax does not withdraw from the district, then the tax will not be imposed.  

A single–council district for which a tax has not been levied may be dissolved in the same manner in which it was formed. A county may withdraw from a consolidated district at any time by filing a petition, as described in the act, with the circuit court having jurisdiction over the council. The court must hear evidence on the petition, and if it determines it is in the best interest of the county inhabitants, it must submit the question to the voters at the next general municipal election. If two–thirds of the voters vote in favor of withdrawing from the district, the court must issue an order withdrawing the county from the district. However, the withdrawal will not become effective until the following January 1 and the district will remain intact for the purposes of paying all outstanding and lawful obligations and to dispose of the district’s property.  

The governing body of any district may seek voter approval to increase its current tax rate, provided the tax will not exceed thirty cents per one hundred dollars of assessed valuation. The governing body must submit such a question to the voters at the next general municipal election. In a single–council district, if a majority of the voters in the county approve the question, the tax will be imposed. In a consolidated district, a majority of voters in the district is required.  

Election costs are to be paid by the extension district, as provided in the act. (Vetoed 7/2/13)  

SCS/SBs 10 & 25 – Creates a refundable income and financial institutions tax credit which may be available for sports commissions, certain nonprofit organizations, counties, and municipalities to offset expenses incurred in attracting amateur sporting events to the state.  

Also creates an income, financial institutions, and corporate franchise tax credit equal to 50% of the amount of an eligible donation made, on or after January 1, 2013, to a certified sponsor or local organizing committee for the purposes of attracting sporting events to the state.  

The provisions of this act shall automatically sunset six years after August 28, 2013, unless reauthorized. (Signed 3/29/13)  

HCS/SS/SCS/SBs 20, 15 & 19 – Modifies provisions of law regarding certain benevolent tax credits, including:  

The Public Safety Officer Surviving Spouse Tax Credit program;  

The Children in Crisis Tax Credit program Advocate Fund;  

The section of law that creates a tax credit for certain taxpayers who modify their homes to make them accessible for a disabled resident;  

The Rebuilding Communities tax credit program;  

The tax credit for contributions to pregnancy resource centers (reauthorized to December 31, 2019);  

The tax credit for donations to food pantries (reauthorized to December 31, 2019);  

and the developmental disability care provider tax credit program.  

This act has an emergency clause. (Signed 3/29/13)  

CCS/HCS/SB 23 – Eliminates both state and local use taxes on the storage, use or consumption of motor vehicles, trailers, boats, or outboard motors. Specifies that a sales tax is to be collected for the titling of such property. The rate of tax associated with titling will be the sum of state sales tax and the local sales tax rate in effect at the address of the owner of the property.  

All local taxing jurisdictions that have not previously approved a local use tax must put to a vote of the people whether to discontinue collecting sales tax on the titling of motor vehicles purchased from a source other than a licensed Missouri dealer. If a taxing jurisdiction does not hold such a vote before November 2016, the taxing jurisdiction must cease collecting the sales tax. Taxing jurisdictions may at any time hold a vote to repeal the tax. Language repealing the tax must also be put to a vote of the people any time 15% of the registered voters in a taxing jurisdiction sign a petition requesting such.  

The act contains a nonseverability clause for these provisions.  

This act has an emergency clause for these provisions.  

Creates the “Rebuild Damaged Infrastructure Program” to provide funding for the reconstruction, replacement, or renovation of, or repair to, any infrastructure damaged by a presidentially declared natural disaster.  

Allow Pettis County to spend revenue from the county transient guest tax on salaries.  

Exempts nongovernmental agencies congressionally mandated to provide disaster relief services from transient guest taxes.  

Authorizes certain counties to impose a transient guest tax. If approved by a public vote, not to exceed more than 5% per room per night.  

Also includes provisions relating to  

Farmington and Perryville weed and trash removal and Farmington ordinances.  

Currently, 50% of additional revenue generated by taxes and attributable to economic activities in a redevelopment area utilizing tax increment financing are to be deposited into the special allocation fund for the TIF project. Certain taxes are exempt from this deposit requirement. This amendment adds taxes imposed to pay for emergency communications systems in St. Louis County to the list of exemptions, but only for projects adopted after August 28, 2013.  

Other provisions affect property taxes on tractors and trailers, freight line companies tax credit, and the Sales Tax Law and the Compensating Use Tax Law.  

Agreements between the executive branch and any person that exempts them from collection of sales and use tax are void unless approved by both chambers of the General Assembly.  

Currently, amounts paid for admission and fees paid to places of amusement, entertainment, recreation, games, or athletic events that are owned or operated by a political subdivision are exempt from sales tax. This act specifies that a political subdivision may enter into a revenue–sharing agreement with private entities providing goods or services for such places. Revenues retained by such private entities will not be exempt from taxes. (Signed 7/5/13)  

SB 35 – For all tax years beginning January 1, 2013, this act authorizes a check–off box on the Missouri individual and corporate income tax forms for contributions to the newly created Pediatric Cancer Research Trust Fund.  

The provisions of this new program expire December 31, 2019.  

This section of law is known as Sahara’s Law. (Signed 6/23/13)  

HCS/SB 99 – Modifies various provisions relating elections, the official state manual, and sale tax ballot issues.  

Eliminates both state and local use taxes on the storage, use or consumption of motor vehicles, trailers, boats, or outboard motors. (See summary of similar provisions under CCS/HCS/SB 23, supra). (Signed 7/5/13)  

HCS/SB 148 – The assessed valuation of any tractor or trailer owned by an individual, partner, or member and used in interstate commerce must be apportioned to Missouri based on the ratio of miles traveled in this state to miles traveled in the United States in interstate commerce during the preceding tax year or on the basis of the most recent annual mileage figures available. (See also Motor Vehicles & Transportation Law)  

HCS/SCS/SB 182 – Eliminates both state and local use taxes on the storage, use or consumption of motor vehicles, trailers, boats, or outboard motors. (See summary of similar provisions under CCS/HCS/SB 23, supra). (Vetoed 4/19/13)  

CCS/SCS/SB 248 – Modifies provisions relating to property taxes, including those relating to notice of neighborhood improvement districts and certain neighborhood improvement districts special assessments.  

Expands the existing law that allows liens against property to be foreclosed for failure to pay NID special assessments.  

Allows county collectors to deliver an electronic copy of the back tax book.  

Specifies that when property taxes are delinquent, if a person other than the owner or a lienholder pays the original property taxes plus interest without the knowledge and consent of the owner, that payment will not invoke a lien on the property or person.  

Currently, county collectors are authorized to use procedures for selling property when the property taxes are delinquent and when special assessments for Neighborhood Improvement Districts are delinquent. This act gives collectors the option to use these procedures when other types of special assessments are delinquent.  

When real estate is sold for delinquent taxes or other debt, if the property sells for a greater amount than the debt, the additional money is placed in a trust fund for the owners of the property for three years. This act specifies that if the funds are not called for as part of a redemption or collector’s deed issuance, then they become part of the permanent school fund of the county.  

Eliminates specific language authorizing fees of twenty–five and fifty cents that the county collector is authorized to collect when recording a certificate of purchase of land sold at a tax sale. The collector will continue to be authorized to receive the fee necessary to record the certificate of purchase. The act also eliminates language authorizing a one dollar and fifty cent fee for certain tax deeds. The act also removes a requirement that the county clerk witness the county collector sign the deed given to someone who purchases property at a tax sale. (Signed 7/1/13)  

SB 257 – This act modifies the Port Improvement District Act.  

Provides that a port authority shall repeal by resolution the continuation of any real property tax when all obligations of the port improvement project have been met, unless the real estate tax in any way secures outstanding obligations of the port improvement project or covers ongoing expenses the port authority has incurred to pay qualified project costs of any of the approved port improvement project.  

Any remaining funds in such special trust fund which exceed any remaining obligations of the port improvement project and are not needed to cover ongoing expenses shall be refunded pro–rata to the property owners.  

No mail–in ballot election is required to levy a sales tax if the port authority is the owner of all of the real property within the proposed district.  

Under current law, the provisions of the Port Improvement District Act are nonseverable meaning that if one provision is found invalid the entire act is invalidated. This act makes the provisions of the Port Improvement District Act severable. (Signed 6/25/13)  

SB 350 – Prohibits the issuance of the renter’s portion of the senior citizens property tax credit. The Department of Revenue is required to calculate how much of the renter’s portion of the tax credit was redeemed in fiscal year 2012. Beginning fiscal year 2014, such amount will be deposited in to the newly created Missouri Senior Services Protection Fund. Moneys in the fund shall be used for services for low–income seniors and disabled persons. (Vetoed 5/14/13)  

HCS/HB 128 – Currently, in all counties other than counties with a charter form of government or counties under township organization, statements of property taxes due are sent by mail to taxpayers. This act authorizes such counties to send the statement electronically. The electronic address provided by the taxpayer will be considered a closed record.  

No penalty or interest will be imposed on delinquent property taxes if the statement was mailed less than thirty days before the delinquent date and the taxpayer paid the taxes within fifteen days of the delinquent date or fifteen days of receiving the mailed statement, whichever occurs later.  

Currently, 50% of additional revenue generated by taxes and attributable to economic activities in a redevelopment area utilizing tax increment financing are to be deposited into the special allocation fund for the TIF project. After August 28, 2013, taxes imposed to pay for emergency communications systems in St. Louis County are added to the list of exemptions from this requirement. The amendment also adds what is commonly referred to as the “Arch Tax” to the exemptions.  

Determines Missouri taxable income for a corporation by dividing in state sales by the total amount of sales and multiplying this fraction by the net income of the corporation. A sale is in state if the purchaser’s destination point is in this state. A sale is not in this state if the purchaser’s destination point is outside this state. (Signed 7/12/13)  

SS/SCS/HCS/HB 175 – Creates a uniform definition for taxes owed as it is applicable to township counties.  

Modifies provisions relating to neighborhood improvement districts.  

Allows the collector to deliver an electronic copy of the back tax book.  

Specifies that when property taxes are delinquent, if a person other than the owner or a lienholder pays the original property taxes plus interest without the knowledge and consent of the owner, that payment will not invoke a lien on the property or person.  

When real estate is sold for delinquent taxes or other debt, if the property sells for a greater amount than the debt, the additional money is placed in a trust fund for the owners of the property for three years. If the funds are not called for as part of a redemption or collector’s deed issuance, then they become part of the permanent school fund of the county.  

The act eliminates specific language authorizing certain fees. The collector will continue to be authorized to receive the fee necessary to record the certificate of purchase. The act also eliminates language authorizing a one dollar and fifty cent fee for certain tax deeds.  

Also removes a requirement that the county clerk witness the county collector sign the deed given to someone who purchases property at a tax sale. (Signed 7/1/13)  

SS/HB 184 – Eliminates both state and local use taxes on the storage, use or consumption of motor vehicles, trailers, boats, or outboard motors. (See summary of similar provisions under CCS/HCS/SB 23, supra).  

Allows Pettis County to spend revenue from the county transient guest tax on salaries.  

Creates the Missouri Works Program. A qualifying company may retain a certain amount of withholding taxes for new jobs if specified criteria are met.  

In addition to the withholding taxes, a qualified company that creates ten or more new jobs with a specified average wage may also receive a tax credit up to six percent of new payroll. No company will be eligible for a total amount of benefits under this provision and the retention of withholding taxes for an amount in excess of nine percent of payroll. Criteria are established for the Department of Economic Development to determine the amount of the tax credit. In lieu of the benefits provided in the preceding two paragraphs, a qualified company may retain withholding taxes on new jobs in a specified amount. In addition to the withholding taxes retention, a qualified company may be awarded additional tax credits.  

Limitations on these benefits are set out, including clawback provisions.  

If there is a significant probability that a company may relocate to another state, the Department may authorize a company to retain up to 100% of its withholding taxes.  

The Department of Economic Development is required to responds to request for benefits within 5 days and notice of intent within 30 days. Failure to respond to a notice of intent will result in an approval of the notice of intent.  

If a qualified company participates in a job training program authorizing retention of withholding tax, the company will not retain withholding tax under this program but will be issued a refundable tax credit for the amount of the benefit they would be allowed under this program. Companies employing individuals that are not legally allowed to work in the United States will be ineligible for benefits under the program. Companies that become delinquent on their taxes will have their benefits authorized under this program reduced by the delinquent amount.  

The total amount of tax credits that may be authorized under the program is limited to $106 million for FY 2014, $111 million for FY 2015, and $116 million for any fiscal year thereafter. Tax credits issued under the program are transferable but may not be carried forward or back.  

After August 28, 2013, no new benefits shall be authorized under the Development Tax Credit, the Rebuilding Communities Tax Credit Program, Enhanced Enterprise Zone Tax Credit Program, and the Missouri Quality Jobs Program. Companies receiving benefits under this act are barred from benefit under the Manufacturing Jobs Act for the same jobs.  

The Missouri Works Program will sunset on August 28, 2019.  

Despite the prohibition of further state benefits under the program after August 28, 2013, governing authorities may still designate zones and provide local tax abatement.  

An enhanced enterprise zone may be created by ordinance or resolution by the governing authority.  

Approval by the Department of Economic Development is no longer required and the enhanced enterprise zone will become effective upon passage of the resolution or ordinance. (Signed 7/11/13)  

SS/HB 253 – Modifies provisions relating to taxation.  

Modifies the individual income tax rate table. The maximum tax rate on personal income will be reduced by one–half of a percent over a period of years. Each reduction to the rate will be by one–twentieth of a percent. No reduction will go into effect unless the general revenue in the previous fiscal year exceeded the amount of general revenue in any one of the three fiscal years prior to such year by at least $100 million. Once fully phased in, the top rate of tax on individual income will be five and one–half percent. If the federal government pass the Marketplace Fairness Act of 2013, or similar legislation, the maximum rate of tax on personal income will be reduced an additional one–half of a percent.  

Creates an individual income tax deduction for business income and phases it in over a five–year period. Taxpayers will be allowed to deduct ten percent of business income for the 2014 tax year and, once fully phased–in, will be allowed a 50% deduction for all tax years after the 2017 tax year. Shareholders of S corporations and partners in partnerships will be allowed a proportional deduction based their share of ownership.  

Reduces the tax rate on corporate income by 3% over a period of years. Each reduction to the rate will be by three–tenths of a percent. No reduction will go into effect unless the general revenue for the previous fiscal year exceeded the amount of general revenue in any of the three fiscal years prior to such year by at least $100 million. Once fully phased in, the top rate of tax on corporate income will be three and one–quarter percent.  

Currently, there is a personal exemption amount of $2,100 for personal income taxes. This act increases the exemption amount by $1,000 for individuals with a Missouri adjusted gross income of less than $20,000.  

Currently, an employer is allowed to file an annual withholding tax return instead of four quarterly returns when the aggregate amount withheld is less than $20 in each of the four preceding quarters. The act changes the amount to less than $100 in each of the four preceding quarters if the employer is not otherwise required to file a withholding return on a quarterly or monthly basis.  

Requires the Department of Revenue to enter into the Streamlined Sales and Use Tax Agreement.  

Cities imposing sales taxes must notify the Department within 10 days of changing their boundaries.  

Any sales tax changes due to a boundary change will take affect on the first day of the calendar quarter 120 days after the Department receives notice of the change.  

When a political subdivision changes its local sales tax rate or taxing boundary, such change shall take effect on the first day of the calendar quarter 120 days after the Department receives notice of the change.  

The act requires all state and local sales taxes to have the same bases by requiring identical exemptions at the state and local level. Provides uniform sourcing rules to determine what tax rates will apply to certain transactions.  

Political subdivisions are prohibited from opting out of the sales tax holiday.  

The act requires the Department to participate in an on–line registration system for sales tax collection. Registration in the system cannot be used as a factor to determine nexus with this state. The Department is required to accept electronic payments. Sellers will be allowed to deduct uncollectible bad debts attributable to taxable sales from sales tax remittances.  

The Department must provide electronic databases for taxing jurisdiction boundary changes, tax rates, and a taxability matrix detailing taxable property and services. Sellers will be relieved from liability if they fail to properly collect tax based upon certain information provided by the department.  

Amnesty will be available for sellers under certain circumstances following registration with the state.  

Monetary allowances will be provided to sellers and certified service providers for collecting and remitting state and local taxes equal to two percent of the taxes collected. Sellers and certified service providers are prohibited from simultaneously receiving the monetary allowance and the two percent timely filed discount provided under current law. The act sets out requirements for the seller and purchaser for tax exempt sales.  

For products that are bundled, with one item being taxable and the other nontaxable, the entire product will be subject to taxation unless the provider can properly identify the nontaxable portion. For products that are bundled items with different tax rates, the highest tax rate will be used for the entire product unless the provider can properly identify the lower taxed item.  

The provisions relating to the Streamlined Sales and Use Tax Agreement have an effective date of January 1, 2015.  

Makes agreements between the executive branch and any person that exempts them from collection of sales and use tax void unless approved by both chambers of the General Assembly.  

The definition of “engages in business activities within this state” is modified. The use of media to exploit Missouri’s market will no longer make a vendor meet the definition. Being controlled by the same interests which control a seller engaged in a similar line of business in this state will also no longer meet the definition.  

Under the Compensating Use Tax Law, a presumption is created that a vendor engages in business activities within this state if any person with a substantial nexus to Missouri performs certain activities in relation to the vendor within this state. The presumption may be rebutted by showing that the person’s activities are not significantly associated with the vendor’s ability to maintain a market in Missouri.  

A second presumption is created that a vendor engages in business activities within this state if the vendor enters into an agreement with a resident of Missouri to refer customers to the vendor and the sales generated by the agreement exceeds $10,000 in the preceding twelve months. This presumption may be rebutted by showing that the Missouri resident did not engage in activity within Missouri that was significantly associated with the vendor’s market in Missouri in the preceding twelve months.  

The definition of “maintains a place of business in this state” is modified to remove common carriers from its provisions. Currently, there is an exemption from the definition of vendor for vendors whose gross receipts are less than certain amounts, do not maintain a place of business in Missouri, and have no selling agents in Missouri. This act removes the exception.  

Grants amnesty for payment of all penalties, additions to tax, and interest accrued on state tax liability due but unpaid as of December 31, 2012. Persons that are a party to a criminal investigation or civil or criminal litigation and relating to unpaid taxes will be ineligible for the amnesty. Taxpayers granted amnesty cannot participate in future amnesty programs for the same tax. (Vetoed 6/5/13)  

HB 316 – Under current law, a provision establishing the Division of Tourism Supplemental Revenue Fund and requiring the deposit into such fund of a portion of certain sales taxes derived from the retail sale of tourist–oriented goods and services is set to expire June 30, 2015. This act extends the expiration date to June 30, 2020. (Signed 6/27/13)  

CCS/SS/HB 336 – Modifies provisions relating to emergency services.  

Currently, 50% of additional revenue generated by taxes and attributable to economic activities in a redevelopment area utilizing tax increment financing are to be deposited into the special allocation fund for the TIF project. Certain taxes are exempt from this deposit requirement.  

This act adds to the list of exemptions, for projects approved after August 28, 2013, taxes imposed to pay for emergency communications systems.  

Under current law, when certain cities annex property located within the boundaries of a fire protection district, the city takes over fire protection service for that property and the fire protection district can no longer collect taxes upon such property. This act provides that when the City of De Soto annexes property located within a fire protection district, the district and not the city continues to provide fire and emergency medical services to the annexed property. The fire protection district may not tax the annexed area except for any bonded indebtedness that existed prior to the annexation. The annexing city must pay the district an amount equal to that which the fire protection district would have levied on all taxable property within the annexed area. (See also Local Government)  

SS/SCS/HB 542 – Allows University of Missouri extension councils, except for any council located in St. Louis County, to form extension districts made up of cooperating counties for the purpose of funding extension programming. (See summary of similar provisions under CCS#2/HCS/ SCS/SB 9, supra).  

Urban Agricultural Zones – Allows a person or organization to submit to any incorporated municipality an application to develop a UAZ on a blighted area of land.  

The governing body of any municipality planning to seek a UAZ must establish an UAZ board. Qualifications and requirements of the board are set forth in this act. The board shall be responsible for reviewing and assessing UAZ activities.  

The real property of the UAZ shall not be subject to property tax assessment for 25 years, except to the extent that the amount is not greater than the amount of taxes due during the preceding year in which the UAZ was designated. At the conclusion of the period of tax abatement, the property shall then be reassessed. If only a portion of the property is used as an UAZ, only that portion of the property shall be exempt.  

If water services for the UAZ are provided by the municipality, the municipality may authorize a grower UAZ to pay wholesale water rates, and 50% of the cost to hook onto the water source.  

Any local sales tax revenues received from the sale of products in the UAZ shall be deposited into the Urban Agricultural Zone Fund. An amount equal to 1% shall be retained by the Director of Revenue for deposit into general revenue. The state treasurer shall be the custodian of the fund and may approve disbursements. School districts may apply to the Department of Agriculture for money in the fund to be used for the development of curriculum on or the implementation of urban farming practices under the guidance of the University of Missouri extension service and a certified vocational agricultural instructor. The funds are to be distributed on a competitive basis within the school district(s) in which the UAZ is located.  

This act exempts St. Charles County from this section. (Signed 7/2/13)  

CCS#2/SCS/HCS/HB 1035 – Modifies provisions relating to political subdivisions.  

Currently, 50% of additional revenue generated by taxes and attributable to economic activities in a redevelopment area utilizing tax increment financing are to be deposited into the special allocation fund for the TIF project. Certain taxes are exempt from this deposit requirement. This act adds for projects approved after August 28, 2013, taxes imposed to pay for emergency communications systems in St. Louis County to the list of exemptions. The act also adds what is commonly referred to as the “Arch Tax” to the exemptions.  

Currently, taxing authorities levying a property tax must file a form with the State Auditor every year. The State Auditor then determines if the tax rate complies with state law. This act allows taxing authorities to amend the form. The amended form must be accompanied by an explanation of the need for changes. The State Auditor must take the amended form into consideration when determining if the tax rate complies with state law.  

Specifies that tractors or trailers used in interstate commerce will have their Missouri assessed value based on the ratio of the number of miles traveled in Missouri and the number of total miles traveled.  

Changes provisions relating to standards county assessors are required to use when determining the value of motor vehicles for personal property tax purposes.  

Currently, all counties are required to deposit a percentage of property taxes collected into the assessment fund of the county. An additional amount is required to be deposited in the fund until December 31, 2015. This act requires collection of the additional amount indefinitely.  

Currently, taxpayers may appeal the decision of a board of equalization to the State Tax Commission. The State Tax Commission is required to assign a hearing officer within 60 days of the appeal being filed. (See also Local Government Law)