HCS HB 958 -- TAXATION (Smith, 14)

COMMITTEE OF ORIGIN:  Committee on Tax Reform

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 unless the collector is prevented
from mailing the statements by circumstances beyond the
collector's control.  A county's charter will determine the fees
charged for the collection of delinquent and back taxes if the
rate is different from the rate allowed by law.

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.

INCOME TAX CREDIT FOR VOLUNTEER FIREFIGHTERS (Section 135.610)

Beginning January 1, 2009, the substitute authorizes an annual
$180 income tax credit for volunteer firefighters who complete
during the year at least 12 hours of any firefighter training
program approved by the Office of the State Fire Marshal within
the Department of Public Safety.  If the firefighter completes at
least 36 additional hours of training after the initial 12 hours
of training during the year, the firefighter may claim a $360
credit.  The tax credit is not refundable but can be carried
forward for four years.

INCOME TAX CREDIT FOR GREEN BUILT HOMES (Section 135.663)

Beginning January 1, 2010, the substitute authorizes an income
tax credit for eligible costs incurred by taxpayers in building
homes that meet certain green build standards.  The credit ranges
from 45 cents per square foot for homes that meet the minimum
green build standards to $1.15 for homes that meet the maximum
standards.  The tax credits are not refundable, but may be
transferred or carried back or forward to any of the taxpayer's
subsequent taxable years.

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

Beginning January 1, 2010, 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, beef, and pork
production will be based on the amount of livestock or milk
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 or milk.

The Missouri Agricultural and Small Business Development
Authority cannot issue more than $20,000 in tax credits per
eligible taxpayer per year.  The tax credit is not refundable but
can be transferred.  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.

MEHLVILLE SCHOOL DISTRICT TAX LEVY (Section 137.073)

The substitute changes the procedures for calculating the tax
levy in the Mehlville School District so that if the district
passes an increase in its tax rate ceiling which must be revenue
neutral under the Hancock Amendment, the tax rate ceiling can
increase so the revenue received from its property tax the
following year equals the amount the district would have received
from an increase in the tax rate ceiling had there been no
reduction in the assessed valuation of real property in the
district.

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 (Sections 142.800 and 2)

The substitute specifies that the definition of "diesel fuel" for
motor fuel tax purposes does not include biodiesel until the
biodiesel is blended with other diesel fuel or sold for highway
use.  The Department of Revenue must develop a uniform and
simplified rule for all motor fuel tax exemptions that minimizes
the time between requesting and receiving a refund and reduces
and splits the administrative burden between the fuel wholesaler,
fuel retailer, and tax-exempt entity.

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.

FRANCHISE TAXES OF CREDIT INSTITUTIONS (Section 148.657)

The substitute allows limited liability company members and
limited liability partnership partners to take a credit against
their income tax for the pro-rata share of the franchise tax paid
by the credit institution.

HOSPITAL DISTRICT SALES TAXES (Section 205.202)

Hospital districts in certain counties, including Ripley County,
upon voter approval, are authorized to abolish the hospital
district property tax and impose a retail sales tax of up to 1%
for the purpose of funding the hospital district.  Moneys
collected from the tax will be deposited into the newly created
Hospital District Sales Tax Fund with 1% retained and deposited
into general revenue by the Director of the Department of Revenue
for the cost of collection.

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.

GLOBAL POSITIONING SYSTEMS (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; the tax credit for volunteer
firefighters; and the income tax deduction for alternative energy
sources will expire December 31 six years from the effective
date.   The provisions of the substitute regarding the tax credit
for new homes that meet green build standards will expire
December 31 five years from the effective date.

The substitute contains an emergency clause for the provisions
regarding the hospital district sales tax.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $124,574
to More than $43,056,194 in FY 2010, $152,475 to More than
$47,424,095 in FY 2011, and $155,273 to More than $47,440,441 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.

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