90TH GENERAL ASSEMBLY
LEVIN, CHRISMER, HOLLINGSWORTH, ROBIRDS, WAGNER, REYNOLDS AND WILSON (42).
Pre-filed December 2, 1999, and 1000 copies ordered printed.
Read 1st time January 5, 2000.
Read 2nd time January 6, 2000, and referred to the Committee on Ways and Means, January 6, 2000.
Reported from the Committee on Ways and Means, April 5, 2000, with recommendation that the bill Do Pass.
Taken up for Perfection May 1, 2000. Bill ordered Perfected and printed, as amended.
To repeal section 143.121, RSMo 1994, and sections 135.010, 137.115 and 143.124, RSMo Supp. 1999, relating to income taxation, and to enact in lieu thereof seven new sections relating to the same subject, with an effective date for certain sections.
Section A. Section 143.121, RSMo 1994, and sections 135.010, 137.115 and 143.124, RSMo Supp. 1999, are repealed and seven new sections enacted in lieu thereof, to be known as sections 135.010, 135.918, 137.115, 143.114, 143.121, 143.124 and 1, to read as follows:
135.010. As used in sections 135.010 to 135.030 the following words and terms mean:
(1) "Claimant", a person or persons claiming a credit [under] pursuant to sections 135.010 to 135.030. If the persons are eligible to file a joint federal income tax return and reside at the same address at any time during the taxable year, then the credit may only be allowed if claimed on a combined Missouri income tax return or a combined claim return reporting their combined incomes and property taxes. A claimant shall not be allowed a property tax credit unless the claimant or spouse has attained the age of sixty-five on or before the last day of the calendar year and the claimant or spouse was a resident of Missouri for the entire year, or the claimant or spouse is a veteran of any branch of the armed forces of the United States or this state who became one hundred percent disabled as a result of such service, or the claimant or spouse is disabled as defined in subdivision (2) of this section, and such claimant or spouse provides proof of such disability in such form and manner, and at such times, as the director of revenue may require, or if the claimant has reached the age of sixty on or before the last day of the calendar year and such claimant received surviving spouse Social Security benefits during the calendar year and the claimant provides proof, as required by the director of revenue, that the claimant received surviving spouse Social Security benefits during the calendar year for which the credit will be claimed. The residency requirement shall be deemed to have been fulfilled for the purpose of determining the eligibility of a surviving spouse for a property tax credit if a person of the age of sixty-five years or older who would have otherwise met the requirements for a property tax credit dies before the last day of the calendar year. The residency requirement shall also be deemed to have been fulfilled for the purpose of determining the eligibility of a claimant who would have otherwise met the requirements for a property tax credit but who dies before the last day of the calendar year;
(2) "Disabled", the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months. A claimant shall not be required to be gainfully employed prior to such disability to qualify for a property tax credit;
(3) "Gross rent", amount paid by a claimant to a landlord for the rental, at arm's length, of a homestead during the calendar year, exclusive of charges for health and personal care services and food furnished as part of the rental agreement, whether or not expressly set out in the rental agreement. If the director of revenue determines that the landlord and tenant have not dealt at arm's length, and that the gross rent is excessive, then he or she shall determine the gross rent based upon a reasonable amount of rent. Gross rent shall be deemed to be paid only if actually paid prior to the date a return is filed. The director of revenue may prescribe regulations requiring a return of information by a landlord receiving rent, certifying for a calendar year the amount of gross rent received from a tenant claiming a property tax credit and shall, by regulation, provide a method for certification by the claimant of the amount of gross rent paid for any calendar year for which a claim is made. The regulations authorized by this subdivision may require a landlord or a tenant or both to provide data relating to health and personal care services and to food. Neither a landlord nor a tenant may be required to provide data relating to utilities, furniture, home furnishings or appliances;
(4) "Homestead", the dwelling in Missouri owned or rented by the claimant and not to exceed five acres of land surrounding it as is reasonably necessary for use of the dwelling as a home. It may consist of part of a multidwelling or multipurpose building and part of the land upon which it is built. "Owned" includes a vendee in possession under a land contract and one or more tenants by the entireties, joint tenants, or tenants in common and includes a claimant actually in possession if he was the immediate former owner of record, if a lineal descendant is presently the owner of record, and if the claimant actually pays all taxes upon the property. It may include a mobile home;
(5) "Income", Missouri adjusted gross income as defined in section 143.121, RSMo, less two thousand dollars as an exemption for the claimant's spouse residing at the same address, and less any social security, railroad retirement and public school retirement system benefits otherwise included in Missouri adjusted gross income, and increased, where necessary, to reflect the following:
(a) [Social Security, railroad retirement, and] Veterans payments and benefits unless the claimant is a one hundred percent service-connected, disabled veteran or a spouse of a one hundred percent service-connected, disabled veteran. The one hundred percent service-connected disabled veteran shall not be required to list veterans payments and benefits;
(b) The total amount of all other public and private pensions and annuities;
(c) Public relief, public assistance, and unemployment benefits received in cash, other than benefits received under this chapter;
(d) No deduction being allowed for losses not incurred in a trade or business;
(e) Interest on the obligations of the United States, any state, or any of their subdivisions and instrumentalities;
(6) "Property taxes accrued", property taxes paid, exclusive of special assessments, penalties, interest, and charges for service levied on a claimant's homestead in any calendar year. Property taxes shall qualify for the credit only if actually paid prior to the date a return is filed. The director of revenue shall require a tax receipt or other proof of property tax payment. If a homestead is owned only partially by claimant, then "property taxes accrued" is that part of property taxes levied on the homestead which was actually paid by the claimant. For purposes of this subdivision, property taxes are "levied" when the tax roll is delivered to the director of revenue for collection. If a claimant owns a homestead part of the preceding calendar year and rents it or a different homestead for part of the same year, "property taxes accrued" means only taxes levied on the homestead both owned and occupied by the claimant, multiplied by the percentage of twelve months that such property was owned and occupied as the homestead of the claimant during the year. When a claimant owns and occupies two or more different homesteads in the same calendar year, property taxes accrued shall be the sum of taxes allocable to those several properties occupied by the claimant as a homestead for the year. If a homestead is an integral part of a larger unit such as a farm, or multipurpose or multidwelling building, property taxes accrued shall be that percentage of the total property taxes accrued as the value of the homestead is of the total value. For purposes of this subdivision "unit" refers to the parcel of property covered by a single tax statement of which the homestead is a part;
(7) "Rent constituting property taxes accrued", twenty percent of the gross rent paid by a claimant and spouse in the calendar year.
135.918. This section shall be known and may be cited as the "Missouri Agriculture Investment Tax Credit Act". For tax years beginning on or after January 1, 2000, but before December 31, 2004, an individual taxpayer who qualifies as a farmer pursuant to Section 6654 (i) (2) of Title 26 of the Internal Revenue Code or a corporate taxpayer who qualifies as a farming corporation pursuant to chapter 350, RSMo, shall be allowed to claim a nonrefundable credit against the tax otherwise due pursuant to chapter 143, RSMo, excluding sections 143.191 to 143.265, RSMo, and related provisions, in an amount equal to ten percent of the cost of any item which is allowable as an expensing election pursuant to Section 179 of the Internal Revenue Code for the same tax year. The tax credit allowed pursuant to this section shall not exceed five thousand dollars. An eligible taxpayer shall claim the credit allowed by this section at the time such taxpayer files a return; provided that, a taxpayer who fails to timely file such taxpayer's return, including extensions, shall not be eligible for a credit pursuant to this section. Any amount of credit that exceeds the tax due for a taxpayer's tax year may be carried back to any of the taxpayer's three prior tax years or carried forward to any of the taxpayer's five subsequent tax years. The department of revenue is authorized to adopt any rules or regulations deemed necessary for the effective administration of this section. No rule or portion of a rule promulgated pursuant to the authority of this section shall become effective unless it has been promulgated pursuant to the provisions of chapter 536, RSMo.
137.115. 1. All other laws to the contrary notwithstanding, the assessor or the assessor's deputies in all counties of this state including the city of St. Louis shall annually make a list of all real and tangible personal property taxable in the assessor's city, county, town or district. Except as otherwise provided in subsection 3 of this section, the assessor shall annually assess all personal property at thirty-three and one-third percent of its true value in money as of January first of each calendar year. The assessor shall annually assess all real property, including any new construction and improvements to real property, and possessory interests in real property at the percent of its true value in money set in subsection 5 of this section. The assessor shall annually assess all real property in the following manner: new assessed values shall be determined as of January first of each odd-numbered year and shall be entered in the assessor's books; those same assessed values shall apply in the following even-numbered year, except for new construction and property improvements which shall be valued as though they had been completed as of January first of the preceding odd-numbered year. The assessor may call at the office, place of doing business, or residence of each person required by this chapter to list property, and require the person to make a correct statement of all taxable real property in the county owned by the person, or under his or her care, charge or management, and all taxable tangible personal property owned by the person or under his or her care, charge or management, taxable in the county. On or before January first of each even-numbered year, the assessor shall prepare and submit a two-year assessment maintenance plan to the county governing body and the state tax commission for their respective approval or modification. The county governing body shall approve and forward such plan or its alternative to the plan to the state tax commission by February first. If the county governing body fails to forward the plan or its alternative to the plan to the state tax commission by February first, the assessor's plan shall be considered approved by the county governing body. If the state tax commission fails to approve a plan and if the state tax commission and the assessor and the governing body of the county involved are unable to resolve the differences, in order to receive state cost-share funds outlined in section 137.750, the county or the assessor shall petition the administrative hearing commission, by May first, to decide all matters in dispute regarding the assessment maintenance plan. Upon agreement of the parties, the matter may be stayed while the parties proceed with mediation or arbitration upon terms agreed to by the parties. The final decision of the administrative hearing commission shall be subject to judicial review in the circuit court of the county involved. In the event a valuation of subclass (1) real property within any county of the first classification with a charter form of government, or within a city not within a county, is made by a computer, computer-assisted method or a computer program, the burden of proof, supported by clear, convincing and cogent evidence to sustain such valuation, shall be on the assessor at any hearing or appeal. In any such county, unless the assessor proves otherwise, there shall be a presumption that the assessment was made by a computer, computer-assisted method or a computer program. Such evidence shall include, but shall not be limited to, the following:
(1) The findings of the assessor based on an appraisal of the property by generally accepted appraisal techniques; and
(2) The purchase prices from sales of at least three comparable properties and the address or location thereof. As used in this paragraph, the word "comparable" means that:
(a) Such sale was closed at a date relevant to the property valuation; and
(b) Such properties are not more than one mile from the site of the disputed property, except where no similar properties exist within one mile of the disputed property, the nearest comparable property shall be used. Such property shall be within five hundred square feet in size of the disputed property, and resemble the disputed property in age, floor plan, number of rooms, and other relevant characteristics.
2. Assessors in each county of this state and the city of St. Louis may send personal property assessment forms through the mail.
3. The following items of personal property shall each constitute separate subclasses of tangible personal property and shall be assessed and valued for the purposes of taxation at the following percents of their true value in money:
(1) Grain and other agricultural crops in an unmanufactured condition, one-half of one percent;
(2) Livestock, twelve percent;
(3) Farm machinery, twelve percent;
(4) Motor vehicles which are eligible for registration as and are registered as historic motor vehicles pursuant to section 301.131, RSMo, and aircraft which are at least twenty-five years old and which are used solely for noncommercial purposes and are operated less than fifty hours per year or aircraft that are home built from a kit, five percent;
(5) Poultry, twelve percent; and
(6) Tools and equipment used for pollution control and tools and equipment used in retooling for the purpose of introducing new product lines or used for making improvements to existing products by any company which is located in a state enterprise zone and which is identified by any standard industrial classification number cited in subdivision (6) of section 135.200, RSMo, twenty-five percent.
4. The person listing the property shall enter a true and correct statement of the property, in a printed blank prepared for that purpose. The statement, after being filled out, shall be signed and either affirmed or sworn to as provided in section 137.155. The list shall then be delivered to the assessor.
5. All subclasses of real property, as such subclasses are established in section 4(b) of article X of the Missouri Constitution and defined in section 137.016, shall be assessed at the following percentages of true value:
(1) For real property in subclass (1), nineteen percent;
(2) For real property in subclass (2), twelve percent; and
(3) For real property in subclass (3), thirty-two percent.
6. Manufactured homes, as defined in section 700.010, RSMo, which are actually used as dwelling units shall be assessed at the same percentage of true value as residential real property for the purpose of taxation. The percentage of assessment of true value for such manufactured homes shall be the same as for residential real property. If the county collector cannot identify or find the manufactured home when attempting to attach the manufactured home for payment of taxes owed by the manufactured home owner, the county collector may request the county commission to have the manufactured home removed from the tax books, and such request shall be granted within thirty days after the request is made; however, the removal from the tax books does not remove the tax lien on the manufactured home if it is later identified or found. A manufactured home located in a manufactured home rental park, rental community or on real estate not owned by the manufactured home owner shall be considered personal property. A manufactured home located on real estate owned by the manufactured home owner may be considered real property.
7. Each manufactured home assessed shall be considered a parcel for the purpose of reimbursement pursuant to section 137.750, unless the manufactured home has been converted to real property in compliance with section 700.111, RSMo, and assessed as a realty improvement to the existing real estate parcel.
8. Any amount of tax due and owing based on the assessment of a manufactured home shall be included on the personal property tax statement of the manufactured home owner unless the manufactured home has been converted to real property in compliance with section 700.111, RSMo, in which case the amount of tax due and owing on the assessment of the manufactured home as a realty improvement to the existing real estate parcel shall be included on the real property tax statement of the real estate owner.
9. The assessor of each county and each city not within a county shall use the trade-in value published in the October issue of the National Automobile Dealers' Association Official Used Car Guide, or its successor publication, as the recommended guide of information for determining the true value of motor vehicles described in such publication. In the absence of a listing for a particular motor vehicle in such publication, the assessor shall use such information or publications which in the assessor's judgment will fairly estimate the true value in money of the motor vehicle.
10. If the assessor increases the assessed valuation of any parcel of subclass (1) real property by more than seventeen percent since the last assessment, excluding increases due to new construction or improvements, then the assessor shall conduct a physical inspection of such property.
11. A homestead exemption pursuant to article X, section 6(a) of the Missouri Constitution shall be allowed for certain real property pursuant to this subsection.
(1) The assessed value of real property satisfying the following criteria shall not be increased by the annual assessments made of real property by the assessor:
(a) The real property is owned by a person sixty-five years of age or older, or jointly owned by at least one person sixty-five years of age or older and other persons all of whom are sixty-five years of age or older; and
(b) The real property is used by the owner as the owner's principal residence and has been used as such for the preceding five years, or when jointly owned the property is used by all joint owners as their principal residence and has been used as such by all joint owners for the preceding five years;
(2) The exemption shall be for that portion of the assessed valuation of the homestead which exceeds the assessed valuation of the homestead in the year the owner reaches eighty years of age or on the effective date of this section, whichever is later;
(3) An eligible property owner may file for such an exemption with the county clerk on a form provided by the state tax commission by June first of the year preceding the first year for which the exemption is to be made. The property owner filing the form shall sign such form attesting to the truth of the information provided by such owner. If the property for which the homestead exemption is sought has joint owners, then any such joint owner may file for the exemption. When any joint owner has elected to file for an exemption all other joint owners shall be bound by such election and the other joint owners shall not subsequently be eligible to file for an exemption for the jointly owned property. No provisions of this section shall be construed to deny the granting of an exemption to property owned by married joint owners when only one of such owners is eligible for the exemption. The applicant shall state on the request that all requirements of subdivision (1) of this subsection are satisfied. The applicant shall file a copy of the person's birth certificate with the county clerk to establish eligibility for the exemption. The applicant shall also file as part of the request a copy of the applicant's most recent Missouri income tax return. The applicant shall sign such request attesting to the truth of the information provided. Once an exemption has been granted, the property owners who filed for the exemption shall not be required to refile for any succeeding year and the property shall remain exempted unless or until the property has a new owner or pursuant to subdivision (6) of this subsection;
(4) The county clerk shall verify from the birth certificate and form that the applicant is eligible for such exemption, and if the applicant is so eligible, the county clerk shall notify the county assessor, county collector and the state tax commission. In addition, the county clerk shall annually deliver to each political subdivision or other taxing jurisdiction which has levied ad valorem property taxes on the properties for which exemptions are granted pursuant to this section a listing of each parcel of real property for which the exemptions are granted;
(5) Any exemption granted pursuant to this subsection shall have no effect on the tax levied for the blind pension fund, pursuant to section 38(b) of article III of the Missouri Constitution, on the property for which the exemption is granted. The tax, however, shall not be collected from the person granted the exemption but a payment in lieu of such tax shall be made by the county within which such property lies. The county shall be reimbursed pursuant to subdivision (5) of this subsection for any revenues lost due to this subdivision;
(6) Pursuant to the requirements of sections 6(a) and 16 of article X of the Missouri Constitution, any taxing jurisdiction or political subdivision shall recover the loss of revenue caused by this subsection from the state. The state tax commission shall certify to the commissioner of administration to issue vouchers to any such taxing jurisdiction or political subdivision upon the availability of appropriations. Each calendar year beginning in 2001 the state tax commission shall estimate the total loss of revenue to all taxing jurisdictions and political subdivisions in the next succeeding year resulting from the homestead exemptions granted in the current year. The state tax commission shall report such estimate to the general assembly before February first of every year. If the general assembly determines there will be insufficient total state revenues, as defined by section 17 of article X of the Missouri Constitution, for the taxing jurisdictions and political subdivisions of the state to recover the estimated loss of revenue caused by the homestead exemption the general assembly may declare that there will be no homestead exemption for the succeeding year.
143.114. 1. For all taxable years beginning on or after January 1, 2001, but before January 1, 2006, there shall be subtracted from an individual's Missouri adjusted gross income an amount equal to the lesser of two thousand dollars or one hundred percent of the amount paid by such individual during his or her taxable year for documented health insurance premiums and out-of-pocket medical costs to the extent such amount is included in the individual's federal adjusted gross income and to the extent such amount is not otherwise deducted therefrom pursuant to any other law and is not reimbursed by any source. For purposes of this section, "out-of-pocket medical costs" are those medical expenses deductible pursuant to section 213 of the Internal Revenue Code and rulings interpreting section 213 of the Internal Revenue Code. The deduction allowed pursuant to this section shall not be refundable.
2. The deduction provided in this section shall be available to an individual whether such individual elects to itemize his or her deductions or elects to deduct the Missouri standard deduction. A married individual filing a Missouri income tax return separately from his or her spouse shall be allowed to make a deduction pursuant to this section in an amount equal to the proportion of such individual's payment of health insurance premiums and out-of-pocket medical expenses.
3. The director of the department of revenue shall place a line on all Missouri individual income tax returns for the deduction created by this section.
143.121. 1. The Missouri adjusted gross income of a resident individual shall be [his] such taxpayer's federal adjusted gross income subject to the modifications in this section.
2. There shall be added to [his] such taxpayer's federal adjusted gross income:
(a) The amount of any federal income tax refund received for a prior year which resulted in a Missouri income tax benefit;
(b) Interest on certain governmental obligations excluded from federal gross income by section 103 of the Internal Revenue Code. The previous sentence shall not apply to interest on obligations of the state of Missouri or any of its political subdivisions or authorities and shall not apply to the interest described in subdivision (a) of subsection 3 of this section. The amount added under this paragraph shall be reduced by the amounts applicable to such interest that would have been deductible in computing the taxable income of the taxpayer except only for the application of section 265 of the Internal Revenue Code. The reduction shall only be made if it is at least five hundred dollars.
3. There shall be subtracted from [his] such taxpayer's federal adjusted gross income the following amounts to the extent included in federal adjusted gross income:
(a) Interest or dividends on obligations of the United States and its territories and possessions or of any authority, commission or instrumentality of the United States to the extent exempt from Missouri income taxes [under] pursuant to the laws of the United States. The amount subtracted [under] pursuant to this paragraph shall be reduced by any interest on indebtedness incurred to carry the described obligations or securities and by any expenses incurred in the production of interest or dividend income described in this paragraph. The reduction in the previous sentence shall only apply to the extent that such expenses including amortizable bond premiums are deducted in determining [his] such taxpayer's federal adjusted gross income or included in [his] such taxpayer's Missouri itemized deduction. The reduction shall only be made if the expenses total at least five hundred dollars;
(b) The portion of any gain, from the sale or other disposition of property having a higher adjusted basis to the taxpayer for Missouri income tax purposes than for federal income tax purposes on December 31, 1972, that does not exceed such difference in basis. If a gain is considered a long-term capital gain for federal income tax purposes, the modification shall be limited to one-half of such portion of the gain;
(c) The amount necessary to prevent the taxation under sections 143.011 to 143.996 of any annuity or other amount of income or gain which was properly included in income or gain and was taxed [under] pursuant to the laws of Missouri for a taxable year prior to January 1, 1973, to the taxpayer, or to a decedent by reason of whose death the taxpayer acquired the right to receive the income or gain, or to a trust or estate from which the taxpayer received the income or gain;
(d) Accumulation distributions received by a taxpayer as a beneficiary of a trust to the extent that the same are included in federal adjusted gross income;
(e) The amount of any state income tax refund for a prior year which was included in the federal adjusted gross income;
(f) The portion of capital gain specified in [subsection 3 of] section 135.357, RSMo, that would otherwise be included in federal adjusted gross income[.];
(g) The amount of any annuities, pensions or retirement allowances annually provided to the taxpayer.
(h) The amount of any social security benefits included in federal adjusted gross income pursuant to section 86 of the Internal Revenue Code.
4. There shall be added to or subtracted from [his] such taxpayer's federal adjusted gross income the taxpayer's share of the Missouri fiduciary adjustment provided in section 143.351.
5. There shall be added to or subtracted from [his] such taxpayer's federal adjusted gross income the modifications provided in section 143.411.
143.124. 1. Other provisions of law to the contrary notwithstanding, for tax years beginning before January 1, 2001, the total amount of all annuities, pensions, or retirement allowances above the amount of six thousand dollars annually provided by any law of this state, the United States, or any other state to any person except as provided in subsection 4 of this section, shall be subject to tax pursuant to the provisions of this chapter, in the same manner, to the same extent and [under] pursuant to the same conditions as any other taxable income received by the person receiving it. For purposes of this section, annuity, pension, or retirement allowance shall be defined as an annuity, pension or retirement allowance provided by the United States, this state, any other state or any political subdivision or agency or institution of this or any other state. For all tax years beginning on or after January 1, 1998, for purposes of this section, annuity, pension or retirement allowance shall be defined to include 401(k) plans, deferred compensation plans, self-employed retirement plans, also known as Keogh plans, annuities from a defined pension plan and individual retirement arrangements, also known as IRAs, as described in the Internal Revenue Code, but not including Roth IRAs, as well as an annuity, pension or retirement allowance provided by the United States, this state, any other state or any political subdivision or agency or institution of this or any other state. For all tax years beginning on or after January 1, 2001, for purposes of this section, annuity, pension or retirement allowance shall not be defined to include any annuities, pensions or retirement allowances subtracted from federal adjusted gross income pursuant to section 143.121. An individual taxpayer shall only be allowed a maximum deduction of six thousand dollars pursuant to this section. Taxpayers filing combined returns shall only be allowed a maximum deduction of six thousand dollars for each taxpayer on the combined return.
2. For the period beginning July 1, 1989, and ending December 31, 1989, there shall be subtracted from Missouri adjusted gross income for that period, determined pursuant to section 143.121, the first three thousand dollars of retirement benefits received by each taxpayer:
(1) If the taxpayer's filing status is single, head of household or qualifying widow(er) and the taxpayer's Missouri adjusted gross income is less than twelve thousand five hundred dollars; or
(2) If the taxpayer's filing status is married filing combined and their combined Missouri adjusted gross income is less than sixteen thousand dollars; or
(3) If the taxpayer's filing status is married filing separately and the taxpayer's Missouri adjusted gross income is less than eight thousand dollars.
3. For [the] tax years beginning on or after January 1, 1990, but before January 1, 2001, there shall be subtracted from Missouri adjusted gross income, determined pursuant to section 143.121, a maximum of the first six thousand dollars of retirement benefits received by each taxpayer from sources other than privately funded sources, and for tax years beginning on or after January 1, 1998, there shall be subtracted from Missouri adjusted gross income, determined pursuant to section 143.121, a maximum of the first one thousand dollars of any retirement allowance received from any privately funded source for tax years beginning on or after January 1, 1998, but before January 1, 1999, and a maximum of the first three thousand dollars of any retirement allowance received from any privately funded source for tax years beginning on or after January 1, 1999, but before January 1, 2000[, and a maximum of the first four thousand dollars of any retirement allowance received from any privately funded source for tax years beginning on or after January 1, 2000, but before January 1, 2001, and a maximum of the first five thousand dollars of any retirement allowance received from any privately funded source for tax years beginning on or after January 1, 2001, but before January 1, 2002, and a maximum of the first six thousand dollars of any retirement allowance received from any privately funded sources for tax years beginning on or after January 1, 2002]. A taxpayer shall be entitled to the maximum exemption provided by this subsection:
(1) If the taxpayer's filing status is single, head of household or qualifying widow(er) and the taxpayer's Missouri adjusted gross income is less than twenty-five thousand dollars; or
(2) If the taxpayer's filing status is married filing combined and their combined Missouri adjusted gross income is less than thirty-two thousand dollars; or
(3) If the taxpayer's filing status is married filing separately and the taxpayer's Missouri adjusted gross income is less than sixteen thousand dollars.
[4.] 5. If, for a tax year beginning before January 1, 2001, a taxpayer's adjusted gross income exceeds the adjusted gross income ceiling for such taxpayer's filing status, as provided in subdivisions (1), (2) and (3) of subsection 3 of this section, such taxpayer shall be entitled to an exemption equal to the greater of zero or the maximum exemption provided in subsection 3 of this section reduced by one dollar for every dollar such taxpayer's income exceeds the ceiling for his or her filing status.
[5.] 6. For purposes of this section, any Social Security benefits otherwise included in Missouri adjusted gross income shall be subtracted; but Social Security benefits shall not be subtracted for purposes of other computations pursuant to this chapter, and are not to be considered as retirement benefits for purposes of this section.
[6.] 7. The provisions of subdivisions (1) and (2) of subsection 3 of this section shall apply during all tax years beginning before January 1, 2001, in which the federal Internal Revenue Code provides exemption levels for calculation of the taxability of Social Security benefits that are the same as the levels in subdivisions (1) and (2) of subsection 3 of this section. If the exemption levels for the calculation of the taxability of Social Security benefits are adjusted by applicable federal law or regulation which applies to tax years beginning before January 1, 2001, the exemption levels in subdivisions (1) and (2) of subsection 3 of this section shall be accordingly adjusted to the same exemption levels for such tax years.
[7.] 8. The portion of a taxpayer's lump sum distribution from an annuity or other retirement plan not otherwise included in Missouri adjusted gross income as calculated pursuant to this chapter, but subject to taxation [under] pursuant to Internal Revenue Code Section 402 shall be taxed in an amount equal to ten percent of the taxpayer's federal liability on such distribution for the same tax year.
[8.] 9. For purposes of this section, retirement benefits received shall not include any withdrawals from qualified retirement plans which are subsequently rolled over into another retirement plan.
[9.] 10. The exemptions provided for in this section shall not affect the calculation of the income to be used to determine the property tax credit provided in sections 135.010 to 135.035, RSMo.
Section 1. 1. For all taxable years beginning on or after January 1, 2001, a resident individual who is allowed a federal earned income tax credit pursuant to section 32 of the Internal Revenue Code shall be allowed a credit against the tax otherwise due pursuant to chapter 143, RSMo, not including sections 143.191 to 143.265, RSMo, in an amount equal to two and one-half percent of the allowable federal earned income tax credit. The tax credit allowed by this section shall be claimed by such individual at the time such individual files a return and shall be applied against the income tax liability imposed by chapter 143, RSMo. Where the amount of the credit exceeds the tax liability, the difference shall be refunded to the taxpayer or carried forward into any subsequent taxable year.
2. The director of the department of revenue shall promulgate rules and regulations to administer the provisions of this section. No rule or portion of a rule promulgated pursuant to the authority of this section shall become effective unless it has been promulgated pursuant to the provisions of chapter 536, RSMo.
3. Notwithstanding the provision of subsection 4 of section 32.057, RSMo, the department of revenue or any duly authorized employee or agent shall determine whether any taxpayer filing a report or return with the department of revenue who has not applied for the credit allowed pursuant to subsection 1 of this section may qualify for the credit, and shall notify any qualified claimant of his or her potential eligibility, where the department determines such potential eligibility exists.
4. Any tax credit allowed pursuant to this section shall be excluded from the calculation of Missouri adjusted gross income as defined in section 143.121, RSMo.
Section B. Section A of this act shall become effective on January 1, 2001, and shall apply to all taxable years beginning after December 31, 2000.
Section C. Section 137.115 of this act shall become effective on January 1, 2002.
Missouri House of Representatives