SB 686 Modifies various provisions of law relating to taxation
Sponsor: Rupp
LR Number: 3448L.05C Fiscal Note: 3448-05N.ORG
Committee: Ways and Means
Last Action: 5/14/2010 - H Calendar S Bills for Third Reading Journal Page:
Title: HCS SB 686 Calendar Position:
Effective Date: August 28, 2010
House Handler: Sutherland

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Current Bill Summary

HCS/SB 686 - Beginning January 1, 2012, statements of no tax due from the Department of Revenue will be required as a prerequisite to the issuance or renewal of state and local business and occupation licenses or to the receipt of payments in excess of ten thousand dollars from the State Legal Expense Fund. The department director may enter into an agreement with any state agency responsible for issuing business and occupation licenses to provide the names and tax identification numbers of applicants for these licenses. Tax delinquencies may result in the suspension of licenses.

Currently, in counties without a charter form of government the collector collects a seven percent fee for the collection of delinquent taxes. In counties with a charter form of government and St. Louis City, the collector collects a two percent fee for the collection of such taxes. Under this act, in counties adopting a charter form of government after January 1, 2008, the collector shall collect a seven percent fee for the collection of delinquent taxes, while the collector in counties adopting a charter form of government before January 1, 2008, shall collect a two percent fee. The provisions contained in a county's charter authorizing the collection of a fee for the collection of back taxes which conflict with state law will control.

The act allows certain counties of the first and second classification to collect property taxes using electronic records and disbursements. County collectors of these counties are required by the fifteenth day of each month to file, with the county clerk and auditor, a detailed statement of all taxes and license fees collected during the preceding month. The act requires payment of current taxes due, in addition to payment of taxes under protest, as a condition precedent to the collector's disbursement of taxes not under protest and the impounding of protested or disputed taxes. Taxing authorities will be required to request notification of current taxes paid under protest by February 1, and county collectors must provide the information by March 1.

This act prohibits the certification of ad valorem tax rates, other than rates necessary to pay principal and interest on outstanding bonds, for political subdivisions located at least partially within charter counties or the City of St. Louis which do not fix their tax rates on or before October first of each year. The act also prohibits the certification of ad valorem property tax rates, other than rates necessary to pay principal and interest on outstanding bonds, for all other political subdivisions which fail to certify their tax rate on or before September first.

The governing body of Montgomery County is authorized to seek voter approval for the imposition of a transient guest tax. The amount of the tax will be at least two, but not more than five percent per occupied room per night, and all revenue derived from such tax will be used by the county to promote tourism. The governing bodies of Kansas City and Columbia are authorized to seek voter approval to impose a one-eighth, one-fourth, one-half, or three-fourths percent sales tax to provide revenues for public safety activities including operations and capital improvements, which may be funded by the issuance of bonds.

The act changes the property tax classification for watercraft that have bath and toilet facilities, a sleeping area, and kitchen and are eligible for the home mortgage interest deduction on the taxpayer's federal income tax return from personal property to residential property. The watercraft must be registered under Chapter 306, RSMo, and be the principal or temporary place of residence of the taxpayer. The assessed valuation of a motor vehicle is limited to the assessed valuation for such vehicle in the previous year or lower. The provision will not apply to a vehicle sold or purchased during the assessment year.

Under current law, assessors in counties without a charter form of government will be required to provide taxpayers with a projected tax liability notice which must accompany a notice of increased assessed value effective January 1, 2011. This act extends the effective date for the projected tax liability notice requirements for assessors in counties without a charter form of government and Jefferson County to January first of the year following the year in which such assessors receive software from the state tax commission which is necessary to provide such notices. For all calendar years prior to January first of the year following receipt of such software, all assessors in counties without a charter form of government and Jefferson County will be required to provide property owners with additional information accompanying the notice of increased assessed value. The notice shall include the previous assessed value and any increase, provide a statement indicating that the change in assessed valued may impact the record owner's tax liability, and provide processes and deadlines for appealing determinations of the assessed value. Such notice shall be provided in a way that alerts the record owner of the potential impact on tax liability and the available appellate processes.

Effective January 1, 2011, the St. Louis County Assessor, must provide taxpayers with a notice that information regarding the assessment method and computation of value for such real property is available on the assessor's website and provide the website address whenever the assessor notifies such taxpayers of changes in assessed value. Such notification shall provide the assessor's contract information so taxpayers without internet access can request and received such information.

The act allows one change of hearing officer for each party to an appeal heard by the State Tax Commission. A party to an appeal need not show cause to receive a change of hearing officer, but must file a written application to disqualify the assigned hearing officer within thirty days of such assignment. Assignment of a hearing officer will be deemed to have occurred when the first scheduling order is issued by the commission and signed by the hearing officer assigned, unless otherwise stated in the order.

The maximum interest rate charged on tracts of land

with delinquent taxes in all counties is reduced from 18% to 9% annually and the maximum penalty per month on lands redeemed prior to sale is reduced from 2% to 1%.

The act modifies the laws regarding the sale of real property for the collection of delinquent taxes. A county collector is required to send up to three notices to the publicly recorded owner of record of the real property prior to the publishing of a tax sale with the first notice being by first class mail. If the assessed valuation of the property is greater than $1,000, a second notice must be sent by certified mail. A third notice by first class mail is required to be sent to the owner of record and the occupant of the real property if the second notice is returned unsigned. A collector of revenue or other collection authority may refuse to accept a delinquent tax payment submitted without a copy of the tax statement. If the county collector determines that an adequate legal description of tax sale property cannot be obtained from documents available through the recorder of deeds, the collector may commission a professional land surveyor to prepare an adequate legal description of the property. Costs of the survey will be taxed as part of the sale costs. The assessed valuation of property that can be listed without a legal description or the name of the record owner is increased from $500 to $1,000. The certificate of purchase will be conveyed to an agent if the purchaser is a nonresident, and the agent must convey the property to the nonresident.

The act requires that the highest bid at a sale on the third successive year must be at least equal to the sum of the delinquent taxes, interest, penalties, and costs as it is required when it was initially offered and at the second successive year it was offered. After the third offering, the collector's deed or trustee's deed will have priority over all the other liens or encumbrances on the property sold except for real property taxes. The purchaser is required to pay a fee to the collector to record the certificate of purchase in the office of the county recorder. If the delinquent land tax sale results in an amount greater than the amount of debt, taxes, interest, and costs, the excess proceeds must be held in trust in the county treasury for three years for the publicly recorded owner or owners of the property sold or their legal representatives. After three years, any amount not called for will be deposited into the county's school fund. The redemption periods for the owner of record to redeem tax sale property are revised; and the owner must reimburse the purchaser for all costs of the sale including the cost for recording the certificate of purchase, the fee to record the release of the certificate, the cost of the title search and the required mail notifications, interest at the rate specified on the certificate, and any taxes paid by the purchaser plus 8% interest. Within 120 days prior to receiving a collector's deed, a tax sale purchaser must obtain a title search report from a licensed attorney or title company detailing the ownership and encumbrances on the property. Requirements for service of the 90 days' notice of the right of redemption that a tax sale purchaser must send to the owner of record and other persons who hold publicly recorded claims on the property are revised. The contents of the affidavit that a tax sale purchaser must provide to the collector before receiving a collector's deed to the property are revised to include the required title search and the 90 days' notice service requirements.

The act provides that in general, sales for resale will not be subject to sales tax provided such subsequent sale is taxed in this or another state, for resale, or exempt from tax. Two exceptions to the general rule are created for charges for admission or seating accommodations at places of amusement, entertainment, or recreation, and for charges for rooms, meals, and drinks. In the case of the two exceptions, operators of such places must remit tax on the gross receipts received by such operators, and subsequent sales will not be subject to tax if they are an arms length transaction for fair market value with an unaffiliated entity.

The act exempts sales of sporting clays, wobble, skeet, and trap targets to any shooting range or similar places of business for use in the normal course of business and money received by a shooting range or similar places of business from patrons and held by a shooting range or similar place of business for redistribution to patrons at the conclusion of a shooting event from state and local sales and use taxes. The act also creates a state and local sales and use tax exemption for sales of utilities by sports complex authorities at such authority's cost that are consumed in connection with the operation of a sports complex leased to a professional sports team.

The act exempts amounts charged by a travel agent or an

intermediary from all hotel or motel local transient guest taxes

or local occupancy taxes.

The provisions regarding the classification of watercraft for tax purposes will expire December 31 six years from the effective date.

The act contains an emergency clause for the provisions

authorizing a sales tax exemption for gratuities, regarding

the sales and use tax treatment of sales for resale, exempting amounts charged by a travel agent or intermediary from certain local taxes, limiting increases in assessed valuation of motor vehicles, authorizing increased funding for public safety in the cities of Columbia and Kansas City, and authorizing increased funding for county assessors to accomplish statutory duties.