HCS HB 624 -- TAXATION

SPONSOR:  Wilson (119)

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
Rural Community Development by a vote of 8 to 1.

This substitute changes the laws regarding taxation and regional
economic development districts.

TAXATION

The substitute:

(1)  Authorizes Perry County to impose, upon voter approval, a
sales tax of up to .25% to equally fund senior services and youth
programs.  A seven-member senior services tax commission must be
established to administer the moneys received for senior
services, and an existing county community task force will
administer the moneys received for youth programs;

(2)  Authorizes any second, third, or fourth classification
county to impose a transient guest tax, upon voter approval, on
all hotel or motel sleeping rooms within the county.  The tax
cannot be more than one cent per room, per night, and must be
used for the promotion of tourism within the county.  Counties
which impose the tax must establish a five-member tourism
commission.  The substitute specifies the membership of the
commission and the term of each commissioner;

(3)  Authorizes the City of Hollister to impose, upon voter
approval, a transient guest tax of 2% to 5% per room, per night,
for the promotion of tourism;

(4)  Requires operators of storage facilities to provide
documentation including the owner's name, address, county of
residence, and a description of the personal property to the
county assessor where the rental or leasing facility is located
for property tax purposes.  The substitute defines "personal
property" as any house trailer, manufactured home, boat, vessel,
floating home, floating structure, airplane, or aircraft.  Any
storage facility owner that fails to provide the required
documentation will be assessed a penalty and taxes for the
personal property stored at their location;

(5)  Authorizes an income tax credit, beginning January 1, 2008,
and ending January 1, 2011, for eligible applicants who install
and operate a qualified alternative fuel station.  This credit
may be claimed for any tax year in which the applicant is
constructing the refueling station.  The credit is equal to the
lesser of $20,000 or 20% of the total costs directly associated
with the purchase and installation of any alternative fuel
storage and dispensing equipment.  Costs associated with
purchasing land, an existing alternative fuel station, or the
construction of a new structure are not considered eligible
costs.  The cumulative amount of tax credits which can be claimed
cannot exceed $3 million in 2008, $2 million in 2009, or $1
million in 2010.  Tax credits may be carried forward for two
years and sold.  Tax credits will be forfeited if a tax credit
recipient stops selling alternative fuel;

(6)  Authorizes a Missouri income tax deduction, beginning
January 1, 2008, for the purchase of a qualified hybrid vehicle.
The tax credit is equal to the lesser of $1,500 or 10% of the
vehicle's purchase price and must be claimed in the tax year in
which the vehicle is purchased;

(7)  Authorizes a tax credit for the purchase of E-85 gasoline.
For calendar year 2008, the tax credit will be 25 cents per
gallon of E-85 gasoline purchased by the taxpayer; for calendar
years 2009 and 2010 the credit will be 20 cents per gallon; and
for calendar years 2011 and beyond, the credit will be 15 cents
per gallon.  The amount of tax credits claimed per taxpayer
cannot annually exceed $500.  The minimum amount that must be
claimed is $50.  The tax credit can be carried forward for three
years.  No more than $500,000 in tax credits can be redeemed
annually;

(8)  Exempts new motor vehicles designed to operate on 85%
ethanol fuel from state sales and use taxes in Fiscal Year 2008;
and

(9)  Specifies that the raw materials used during the primary
manufacturing of automobiles will be assumed to contain at least
25% recovered materials.  Currently, electricity used in the
primary manufacturing of automobiles cannot be assessed local or
state sales taxes if the raw materials used in the processing
contain at least 25% recovered materials.

REGIONAL ECONOMIC DEVELOPMENT DISTRICTS

The substitute:

(1)  Allows two or more governing bodies to establish a regional
economic development district to plan programs encouraging
economic development within the district.  The governing bodies
must enact identical ordinances or mutually agree to the
district's establishment.  The ordinances or mutual agreements
must specify the qualifications, terms, membership, and powers of
the district's board;

(2)  Allows any city or county which has agreed to form a
district to impose, upon voter approval, a sales tax within the
district to be used for economic development purposes.  The sales
tax rate can be 0.125%, 0.25%, 0.375%, or 0.5%;

(3)  Creates the Regional Economic Development District Sales Tax
Fund for the deposit of all revenue levied from the district's
sales tax;

(4)  Prohibits the revenue from the district's sales tax from
being included in calculations of moneys available to other
special taxing districts that may also be a part of the regional
economic development district.  Other special taxing districts
include tax increment financing districts, neighborhood
improvement districts, and community improvement districts.
Revenue from the regional economic development district's sales
tax can only be used for its purposes and cannot be diverted to
any other special taxing district unless approved by the
district's board;

(5)  Requires the board to make a report available to the public
at least annually on the use of its funds;

(6)  Allows the board to adopt incremental tax financing for the
purposes of the district but cannot be used for retail projects;

(7)  Specifies the manner in which ad valorem taxes and payments
in lieu of taxes will be divided among affected taxing districts;

(8)  Allows the district to collect 50% of the economic activity
tax revenue received from sales within the district for 25 years;

(9)  Specifies the requirements of a regional economic
development plan;

(10)  Requires that certain findings be made by the board before
adopting a regional economic development plan, including a
determination that the development area has not been subject to
growth and development through private investment and that this
cannot be reasonably expected to occur without the implementation
of regional economic development projects and the adoption of
incremental tax financing; and

(11)  Allows the district to issue bonds to pay for the costs
associated with the regional economic development projects.

The provisions regarding the tax credit for alternative fuel
stations and the purchase of E-85 gasoline will expire six years
from the effective date.

The provision regarding the transient guest tax in the City of
Hollister has an emergency clause.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of More than
$700,000 in FY 2008, More than $3,090,000 in FY 2009, and More
than $2,260,000 in FY 2010.  Estimated Cost on Other State Funds
of More than $300,000 in FY 2008, FY 2009, and FY 2010.

PROPONENTS:  Supporters say that this is a tool assessors need in
order to identify and tax property within their district.
Currently, assessors do not receive full disclosure regarding who
owns property in mobile home parks, marinas, plane hangars, or
storage facilities.  The bill requires owners of these facilities
to tell the assessor who owns property located at their facility
so that the property owner can be taxed.  Assessors have a duty
to assess taxes in a fair and equitable manner, but when property
owners hide their property so it cannot be taxed, the assessor
cannot do this.  The current system is not fair or equitable
because some people are being taxed while others are not.  The
bill will ensure that everyone is taxed at the same rate.

Testifying for the bill were Representative Wilson (119); and
Missouri Assessor's Association.

OPPONENTS:  Those who oppose the bill say that it places an
unnecessary burden on the owners of mini-storage units since they
generally have no way of knowing what's being stored in their
facilities.  One person may rent the storage unit, but the
property inside belongs to someone else.  Determining this
information within the first two weeks of the year will be very
difficult, and it's unfair to require the mini-storage unit's
owner to pay someone else's property taxes.

Testifying against the bill was Missouri Self-Storage Owners
Association.

Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:19 am