HB 969 -- INCOME TAX:  INTANGIBLE PROPERTY

SPONSOR:  Cooper (120)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Tax Policy
by a vote of 11 to 7.

This bill establishes a procedure for the determination of tax
liability for purposes of corporate income tax of certain
expenses and costs related to certain intangible property when
the property is transferred to a related entity.

The bill provides specific criteria for determining if
transactional expenses and costs related to the transfer and use
of the rights to patents, trade names, trademarks, and other
intangible property incurred by a taxpayer from a related entity
are a legitimate business expense and are allowed to be deducted
in the computation of Missouri taxable income.

FISCAL NOTE:  Total Estimated Cost on General Revenue Fund of
$86,569 in FY 2005, $0 in FY 2006, and $0 in FY 2007.

PROPONENTS:  Supporters say that the bill puts everyone on an
equal playing field and will provide consistency within the
Missouri tax code.  The bill allows legitimate business
transactions while stopping the use of this practice as a method
of avoiding taxation.

Testifying for the bill were Representative Cooper (120);
Missouri Chamber of Commerce; and Missouri Retailers Association.

OPPONENTS:  There was no opposition voiced to the committee.

OTHERS:  Others testifying on the bill say that it is unclear if
the proposed language will stop this practice from being used to
avoid taxes.

Others testifying on the bill was Department of Revenue.

Bill Tucker, Acting Director of Research

Missouri House of Representatives
92nd General Assembly, 2nd Regular Session
Last Updated September 23, 2004 at 11:14 am