HCS HB 958 -- TAXATION

SPONSOR:  Smith (14)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Tax Reform
by a vote of 10 to 2.

This substitute changes the laws regarding taxation.

NEIGHBORHOOD ASSISTANCE ACT (Section 32.105, RSMo)

Currently, a person or family is considered eligible to qualify
for assistance from the Missouri Housing Development Commission
under the Neighborhood Assistance Act for an affordable housing
unit if the household's combined, adjusted gross income is equal
to or less than the specified percentages of the median family
income for the geographic area in which the residential unit is
located or the median family income for the state, whichever is
greater.  This applies to rental units and owner-occupied units.
The substitute increases the income threshold for an
owner-occupier of an affordable housing unit so that it is double
the threshold required for a rental unit.

PROPERTY TAX STATEMENTS (Section 52.230)

Real and personal property tax statements must be mailed to all
resident taxpayers at least 45 days before the delinquent date in
first classification counties.

EXHIBITION CENTER AND RECREATIONAL FACILITY DISTRICTS (Section
67.2000)

Real property owners in the counties of Caldwell, Clinton,
Daviess, and DeKalb are allowed to petition the governing body of
the county for the creation of an exhibition center and
recreational facility district.

SPECIAL NEEDS CHILD ADOPTION TAX CREDIT (Section 135.327)

The substitute defines "adoption resource center" as a
state-funded agency providing pre- and post-adoption services to
families for preventing adoption disruption and recruiting
adoptive parents.  The substitute specifies that qualified
centers will get an equal portion of the unclaimed funds set
aside for tax credits for non-recurring adoption expenses that is
currently divided equally among court-appointed special advocates
(CASA), child advocacy centers, and crisis care centers.

The substitute also removes obsolete provisions regarding the
adoption tax credit for special needs children.

INCOME TAX CREDIT FOR HOME REMODELING FOR THE DISABLED AND THE
ELDERLY (Sections 135.535 and 135.562)

Currently, up to $100,000 in tax credits remaining unused under
the Rebuilding Communities Tax Credit Program are allocated for
use by taxpayers who modify their homes for a disabled person
residing with them.  The substitute removes the $100,000 overall
cap and adds taxpayers who modify their homes for a senior
citizen residing with them to those eligible for the tax credit.

TAX CREDIT FOR MILK, BEEF, AND PORK PRODUCERS (Sections 32.115,
135.484, 135.535, 135.680, 135.704, 135.706, and 208.770)

Beginning January 1, 2009, the substitute authorizes a tax credit
for any resident taxpayer who is actively engaged in milk, beef,
or pork production.  The tax credit for milk production will be
based on milk production for any month in which the average of
the United States Department of Agriculture (USDA) Uniform Prices
in Federal Orders Numbers 7 and 32 drops below the announced
production price during the calendar year.  The tax credit for
beef and pork production will be based on the amount of livestock
produced and sold at a loss based on market fluctuations which
result in current livestock production costs to exceed the
current market value of the livestock.

Beginning January 1, 2010, and the first day of every month
thereafter, the Missouri Agricultural and Small Business
Development Authority must report and make available to the
public the announced price of milk based on:

(1)  The average price of milk in the top five states where milk
is imported into Missouri;

(2)  The average transportation costs of importing milk from the
top five states where milk is imported into Missouri; and

(3)  The cost of milk production in Missouri.

In any month in which tax credits are available, eligible
taxpayers may be issued a tax credit equal to the sum of the
difference between the average of the USDA price and the
announced price multiplied by the amount of milk produced during
the month in pounds divided by 100.

The authority cannot issue more than $5,000 in tax credits per
eligible taxpayer per year.  The tax credit cannot be transferred
and is not refundable.  It must be claimed in the year in which
the credit is issued against the taxpayer's state tax liability
or quarterly estimated tax or carried forward for up to three
years.  Taxpayers must submit to the authority an application for
the tax credit on a form provided by the authority.  The
authority may charge a service fee.

The authority cannot issue more credits in any calendar year than
are allocable to this program; however, any remaining unissued
tax credits in the following programs may also be made available
annually for allocation to this program:

(1)  Up to $30 million in neighborhood assistance tax credits
which have not been issued by April 30;

(2)  Up to $16 million in rebuilding communities and neighborhood
preservation tax credits which have not been issued by
December 1;

(3)  Up to $10 million in tax credits for investment in, or
relocating a business to, a distressed community which have not
been issued by December 1;

(4)  Up to $15 million in qualified equity investment tax credits
which have not been issued by April 30; and

(5)  Up to $4 million in family development account tax credits
which have not been issued by April 30.

PROPERTY TAX ON CERTAIN WATERCRAFT (Sections 137.016 and 137.080)

For property tax purposes, the substitute changes the
classification from personal property to residential property of
any watercraft that has bath and toilet facilities, a sleeping
area, and kitchen facilities and is eligible for the home
mortgage interest deduction on the taxpayer's federal income tax
return.  The watercraft must be registered under Chapter 306 and
be the principal or temporary place of residence of the taxpayer.

PROPERTY TAX APPEALS (Section 138.431)

A taxpayer is allowed one change in the assignment of a hearing
officer for an appeal of his or her assessed valuation.

MOTOR FUEL TAX EXEMPTION FOR SCHOOL BUSES (Section 142.814)

The substitute exempts fuel used to operate school buses
transporting students for educational purposes from the motor
fuel tax.

INCOME TAX DEDUCTION FOR ALTERNATIVE ENERGY SOURCES (Section
143.112)

Beginning January 1, 2010, the substitute authorizes an income
tax deduction for any taxpayer who purchases certain qualified
fuel cell property that is installed for a dwelling located in
the United States and used as the principal residence by the
taxpayer.  The deduction will be 50% of the purchase price or
$1,000, whichever is less.

The substitute also authorizes an income tax deduction for any
taxpayer who purchases solar energy property to generate
electricity for a dwelling in this state and used as a residence
by the taxpayer.  The deduction will be 50% of the purchase price
or $4,000, whichever is less.

DEPENDENCY EXEMPTION FOR STILLBORN CHILDREN (Section 143.161)

Beginning January 1, 2010, the substitute authorizes an income
tax dependency exemption deduction to a taxpayer for the taxable
year in which a stillborn child was born if the child would
otherwise have been a member of the taxpayer's household and a
certificate of birth resulting in stillbirth has been issued.

MISSOURI ARTS COUNCIL APPROPRIATION (Section 143.183)

The substitute removes the $10 million appropriation limit per
fiscal year to the Missouri Arts Council from the estimate of
income tax revenues of professional athletes and nonresident
entertainers.

SALES TAX EXEMPTION FOR CERTAIN PRESCRIPTION MEDICAL EQUIPMENT,
SUPPLIES, OR DEVICES (Section 144.030)

The substitute authorizes a state and local sales and use tax
exemption for medical equipment, supplies, or devices which are
prescribed by a practitioner or paid by Medicare, Medicaid, or a
third-party health insurer.

PAYMENT OF SALES TAX (Section 144.080)

Sellers are allowed to advertise that the required sales tax will
be assumed or absorbed into the price of the property sold or the
service rendered if the amount of the tax is separately stated on
the invoice or receipt.  Any retailer who fails to separately
state the assumed or absorbed sales tax will be guilty of a
misdemeanor.

TAX CREDIT FOR BANKING INSTITUTIONS (Section 148.064)

A tax credit is authorized to banking institutions in an amount
equal to the tax imposed by foreign states when the Missouri bank
doesn't have a physical presence in the taxing state.  The credit
can be applied to franchise tax and income tax.

When a foreign state imposes a tax on a Missouri bank without a
physical presence in the taxing state, the substitute imposes a
similar tax on the banking institutions chartered in that taxing
state conducting business in Missouri without a physical
presence.

FIRE PROTECTION DISTRICT SALES TAX (Section 321.227)

The substitute allows any fire protection district in St. Louis
County to impose, upon voter approval, a sales tax of up to 1% on
all retail sales within the fire protection district.  Revenues
collected from the sales tax will be deposited into the newly
created Fire Protection District Sales Tax Fund.  Ninety percent
of the revenue will be distributed to the fire protection
district from which the sales tax was collected, and 10% will be
distributed to the fire protection districts per capita based
upon the population of each distressed fire protection district.
Any fire protection district imposing the sales tax must reduce
the district's property tax rate by an amount sufficient to
decrease property tax revenues by 50% of the previous year's
revenue received from the fund.

MOTOR VEHICLE MILES TAX (Section 1)

The use of global positioning systems to monitor mileage in order
to impose any mileage tax in this state is prohibited.

The provisions of the substitute regarding the tax credit for
milk, beef, and pork producers and the provisions regarding an
income tax deduction for alternative energy sources will expire
December 31 six years from the effective date.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 to
More than $40,626,144 in FY 2010, $0 to More than $40,627,764 in
FY 2011, and $0 to More than $40,627,764 in FY 2012.  Estimated
Cost on Other State Funds of More than $1,964,000 in FY 2010,
More than $2,366,000 in FY 2011, and More than $2,377,000 in FY
2012.

PROPONENTS:  Supporters say that it is currently a crime if a
Missouri business advertises to absorb sales tax.  Marketing
research shows that customers are very receptive to sales tax
holidays.  The business must report and pay the tax, and the
receipt will reflect the tax and show that it was paid.

Testifying for the bill were Representative Smith (14); and
Missouri Chamber of Commerce and Industry.

OPPONENTS:  There was no opposition voiced to the committee.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:26 am