HB 1199 -- Tax Incentives for Job Growth

Sponsor:  Grisamore

This bill authorizes a sales and use tax exemption for specified
equipment used by certain data center and server farm facilities
and establishes the Missouri Advantage Act.

SALES AND USE TAX EXEMPTION (Section 144.055, RSMo)

Beginning January 1, 2010, the bill exempts from state and local
sales and use taxes all machinery, equipment, or computers used
by data center and server farm facilities that are more than
50,000 square feet of space.

MISSOURI ADVANTAGE ACT (Sections 620.2056, 620.2059, 620.2062,
620.2065, 620.2068, 620.2071, 620.2074, and 620.2077)

The bill establishes the Missouri Advantage Act which allows
applicants to qualify for benefits in one of five tiers as
follows:

(1)  Tier one requires investing at least $1 million in qualified
property and hiring at least 10 new employees;

(2)  Tier two requires investing at least $3 million in qualified
property and hiring at least 30 new employees;

(3)  Tier three requires hiring at least 30 new employees;

(4)  Tier four requires investing at least $10 million in
qualified property and hiring at least 100 new employees; and

(5)  Tier five requires investing at least $30 million in
qualified property.

Taxpayers who qualify for tier one, two, three, or four projects
are entitled to a credit equal to 3% times the average wage of
new employees times the number of new employees if the average
wage of the new employees equals at least 60% of the Missouri
average annual wage for the year in which the application is
made; 4% of this amount if the average wage of the new employees
equals at least 75% of the Missouri average annual wage; 5% if
the average wage of the new employees equals at least 100% of the
Missouri average annual wage; and 6% if the average wage of the
new employees equals at least 125% of the Missouri average annual
wage.

Taxpayers who meet the requirements for tier two or tier four
projects will receive a credit equal to 10% of the investment
made in qualified property at the project.  Taxpayers who meet
the requirements for tier one projects will receive a credit
equal to 3% of the investment made in the qualified property at
the project.

To utilize these incentives, taxpayers must submit an application
to the Department of Economic Development.  The bill specifies
the requirements of the application, including the application
fees.  After an application is approved, the department and the
taxpayer will enter into a written agreement.  The requirements
of the agreement are specified in the bill.

Any taxpayer receiving benefits under this act cannot
simultaneously receive benefits from the Quality Jobs Act for any
project.

Tax credits for all tiers can be used to offset income taxes due
under Chapter 143.

Tax credits for tier one, two, three, and four projects can also
be used:

(1)  To offset the taxpayer's withholding taxes to the extent
that the liability is attributable to the number of new employees
at the project; and

(2)  To obtain a refund of sales and use taxes which are not
otherwise refundable and which are paid on purchases, including
rentals.  The bill specifies the procedures for an applicant to
claim a refund and when it will be paid.  Interest will be
allowed on any refunds.

Tax credits may be carried forward for up to nine years for tier
one and three projects and for up to 14 years for tier two or
four projects.

If a taxpayer with a tier one or three project fails to meet the
required levels of employment or investment within four years
after the date on which the application was submitted, all or a
portion of the incentives can be recaptured or disallowed.  If a
taxpayer with a tier two, four, or five project fails to meet the
required levels of employment or investment within six years
after the date on which the application was submitted, all or a
portion of the incentives can be recaptured or disallowed.

The Missouri Incentives Fund is created which will consist of
application fees submitted by taxpayers.  Upon appropriation,
moneys in the fund will be used solely for the administration of
the act.

The bill requires the department to submit an annual report to
the General Assembly by July 15.  The bill specifies the
requirements of the report.

Tax credits are not transferrable except in situations specified
in the bill.

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