SS/HCS/HB 1501 - This act modifies provisions relating to tax incentives.DATA STORAGE CENTERS TAX INCENTIVES
Sections 67.2050 & 144.810
This act allows the governing body of any municipality to enter into loan agreements, or sell, lease, or mortgage municipal property to private entities for the development of a technology business facility project. Municipalities include utility boards of counties, cities, towns or villages. Transactions involving the lease or rental of such properties will be exempt from state and local sales taxes and any leasehold interests on such properties will not be subject to property taxes. The act allows municipalities to sell or otherwise dispose of municipal property to private entities for technology business facility projects provided that the terms and methods utilized reasonably protect the economic well being of the municipality. Any private entity which transfers property to the municipality for purposes of a technology business facility project will reserve the right to request that the municipality transfer such property back to the entity at no cost. These provisions will expire on September 1, 2019.
This act provides state and local sales and use tax exemptions for all machinery, equipment, computers, electrical energy, gas, water and other utilities, including telecommunication and internet services, used in new data storage center facilities. The act also provides a state and local sales and use tax exemption for purchases of tangible personal property for the construction of a new data storage center facility. In order to receive the sales tax exemption provided for new data storage center facilities, an application must be made to the Department of Economic Development for certification. Such application must show that the project will result in at least five million dollars of new facility investment and create at least five new jobs with wages of at least 150 percent of the county average wage over a three year period. A project shall be approved even though the investment and job creation requirements are not met if exemptions do not exceed the project fiscal benefit to the state over ten years.
The act also creates a state and local sales and use tax exemption for existing data storage center facilities for all machinery, equipment, computers, electrical energy, gas, water and other utilities, including telecommunication and internet services. The exemption will only apply to the increase in expenditures for utilities over the previous year's expenditures.
The exemption for existing facilities for tangible property will be available only on the increase in expenditures over the average of the previous three years expenditures. In order to receive the sales tax exemption provided for existing data storage center facilities, an application must be made to the Department of Economic Development for certification. Such application must show that the project will result in at least two million dollars of new facility investment over a one year period and create at least two new jobs with wages of at least 150 percent of the county average wage over a two year period. A project shall be approved even though the investment and job creation requirements are not met if exemptions do not exceed the project fiscal benefit to the state over ten years.
The Department of Economic Development and the Department of Revenue are authorized to conduct random audits to ensure compliance with the requirements for state and local sales and use tax exemptions authorized under the act. Taxpayers must enter into a recapture agreement to qualify for sales and use tax exemptions.
The sales and use tax exemption provisions will expire on September 1, 2020. The expiration will not impair any agreements or exemptions granted before the expiration.
These provisions are similar to HB 1444 (2014), HB 1502 (2014), SB 633 (2014), a provision contained in HB 1498 (2014), a provision in HCS#2/SCS/SB 777 (2014), a provision of SB 46 (2013), SCS/SB 584 (2012), SB 8 (1st Ex. Session 2011), SB 217 (2011), and SB 868 (2010).
DISTRESSED AREAS LAND ASSEMBLAGE TAX CREDIT
Section 99.1205
This act reauthorizes a tax credit for distressed areas land assemblage that expired on August 28, 2013. Formerly, an applicant for this tax credit was entitled to a tax credit in an amount equal to fifty percent of the applicant's acquisition costs, which includes among other things the cost of demolishing vacant buildings, and for a five-year period, one hundred percent of the applicant's interest costs. These acquisition costs include the reasonable costs of maintaining an eligible parcel of land for a five-year period after acquiring the parcel. This act extends the five-year time limitation on receiving a tax credit for maintenance costs and interest costs to twelve years. Title insurance, surveying costs, and certain design costs are added to the types of eligible acquisition costs. Interest costs are expanded to include costs related to loans for acquisition.
This act allows parcels to be part of an eligible project if they are acquired on behalf of the applicant through affiliated companies controlled by the applicant. Parcels acquired before August 28, 2007 from a municipal authority will not be considered an eligible parcel.
Formerly, project areas must have contained at least fifty acres of eligible parcels. This act specifies that parcels acquired from a municipal authority cannot be used to meet the fifty acre requirement. The definition of eligible project area is expanded to allow a property within a quarter mile of a former penitentiary site in Jefferson City to qualify without meeting the other requirements.
This act requires redevelopment agreements to include deadlines for commencement of work and project completion and a right of termination by the municipal authority if deadlines are not met.
This act also allows a developer applying for the tax credit to file for the credit on a quarterly basis, rather than annually.
Previously, the aggregate amount of tax credits that may be authorized under the program was $95 million. This act allows for an aggregate authorization of $48 million in tax credits after the effective date. The Department of Economic Development is prohibited from authorizing tax credits under this program after August 28, 2020.
This provision is similar to SB 379 (2013), HB 423 (2013),HB 1130 (2012), HB 1723 (2012), and SB 783 (2012). This provision is similar to a provision contained in HB 1498 (2014) and HCS/HB 698 (2013).
LOW-INCOME HOUSING TAX CREDITS
Sections 135.350 & 135.352
This act modifies provisions relating to low-income housing tax credits. A $130 million dollar fiscal year cap for authorizations of 9% low-income housing tax credits is established for FY 2015. This cap is then lowered over a period of years so that in FY 2019 and thereafter, no more than $110 million in low-income housing tax credits may be issued per fiscal year.
Currently, there is a $6 million fiscal year cap for authorization of 4% low-income housing tax credits. This act lowers the cap to $4 million dollars each fiscal beginning FY 2015. The stacking of state 9% low-income housing tax credits with state historic preservation tax credits for the same project is prohibited. The carry back of the tax credit is eliminated and the carry-forward is reduced from ten years to two years.
These provisions are similar to SB 740 (2014), SB 922 (2014), SB 923 (2014), SB 531 (2012), SCS/SB 548 (2012), and provisions of SB 8 (2011 1st Ex. Session).
MISSOURI EXPORT INCENTIVE ACT
Sections 135.1550 to 135.1575
This act creates the Missouri Export Incentive Act. For all fiscal years beginning on or after July 1, 2014, this act authorizes air export tax credits for freight forwarders in an amount equal to forty cents per chargeable kilo shipped on a qualifying outbound flight from an airport located in this state. The Department of Economic Development is required to adjust the tax credit amounts based upon fluctuations in fuel costs for over-the-road transportation. In order to receive air export tax credits, freight forwarders must file an application with the Department containing the master airway bill for the shipment withing 120 days of the flight. The act requires the Department to establish procedures to allow freight forwarders to receive air export tax credits within twenty business days of the departure of the qualifying flight.
The total aggregate amount of air export tax credits that may be authorized over eight years is $60 million. The authorization of air export tax credits is prohibited after June 30, 2022, but the act allows for the subsequent issuance of any tax credits which are authorized prior to such date.
These provisions are similar to HB 1500 (2014), SB 742 (2014), SB 120 (2013), HB 1476 (2012), HB 840 (2011) & SB 390 (2011). These provisions are similar to a provision in HB 1498 (2014).
HISTORIC PRESERVATION TAX CREDITS
Sections 253.545, 253.550, 253.557 & 253.559
This act modifies provisions of law relating to historic preservation tax credits. Under current law, the Department of Economic Development is prohibited from issuing more than one hundred forty million dollars in historic preservation tax credits in any fiscal year for projects which will receive more than two hundred and seventy-five thousand dollars in tax credits. Beginning fiscal year 2014, and each fiscal year thereafter, this act would prohibit the Department of Economic Development from approving a total amount of more than ninety million dollars in historic preservation tax credits for projects receiving at least $275,000 in tax credits, increased by the amount of any rescissions of approved applications for such tax credits. Projects which would receive less than two hundred seventy-five thousand dollars in tax credits will be subject to a twenty million dollar fiscal year cap.
This act prohibits the Department from issuing more than one hundred twenty-five thousand dollars in historic preservation tax credits per project for non-income producing residential rehabilitation projects.
Applicants for projects that, as of the effective date of the act, have received approval from the Department of Economic Development, incurred certain levels of expenses, or received certification from the state historical preservation officer will not be subject to the new limitations on tax credit issuance, but will be subject to the current law limitations on tax credit issuance.
The stacking of state historic preservation tax credits with state 9% low-income housing tax credits is prohibited. The act defines total costs and expenses of rehabilitation and prohibits the Department of Economic Development from defining it more narrowly than the federal historic preservation program.
Currently, a taxpayer must prove that the building is a certified historic structure or in a certified historic district to be eligible for the tax credit. This act allow the applicant to instead provide evidence that they have submitted documentation to qualify as such.
The act requires applications for final approval to include a cost an expense certification prepared by an independent certified public accountant. After initial approval by the Department of Economic Development, the taxpayer shall be issued 75% of their eligible tax credits. Within 120 after initial approval, the Department shall make a final determination of the amount the taxpayer is eligible for. The Department shall then issue the remaining amount or require the taxpayer to pay back any excess issuance. Taxpayers must repay after six years an amount equal to 25% of developer's fees. An appeals procedure is created for decisions made by the Department of Economic Development and the Department of Natural Resources.
These provisions are similar to SB 740 (2014), SB 922 (2014), SB 923 (2014), HCS/HB 1476 (2012) and to provision in the perfected version of SB 8 (1st Ext. Session 2011).
MISSOURI ANGEL INVESTMENT INCENTIVE ACT
Sections 348.273 & 348.274
This act creates the Missouri Angel Investment Incentive Act. The act provides tax credits to investors in certain companies. The tax credits will be allocated evenly between the congressional districts. Under this program businesses may apply to the Missouri Technology Corporation (MTC) to be designated a qualified business. Each quarter, the MTC will allocate tax credits to these qualified businesses. The tax credit will then be issued to investors and equal to fifty percent of their investment in the business.
The tax credits may be transferred once to an individual or carried forward up to five years. No more than six million dollars in tax credits may be allocated each tax year, but unissued amounts of the tax credit will increase the following fiscal years cap. No tax credits shall be allocated or issued after December 31, 2024. The Department of Economic Development is prohibited from allowing tax credits of more than fifty thousand dollars per qualified business or more than two hundred fifty thousand dollars per investor or owner of an entity investor.
Qualified businesses allocated tax credits are required to report to the MTC annually. The MTC is required to report to the Department of Economic Development quarterly. The Department of Economic Development is required to report annually to the Governor, the President pro tempore of the Senate, and the Speaker of the House of Representatives.
This act is similar to SB 698 (2014), HB 1236 (2014), HB 1310 (2014), HB 1503 (2014), SB 91 (2013), HB 182 (2013), HB 191 (2013), and HB 1593 (2012).
MIKE HAMMANN