SB 46
Modifies several provisions relating to taxation
Sponsor:
LR Number:
0531S.05C
Committee:
Last Action:
5/17/2019 - Informal Calendar S Bills for Perfection--SBs 46 & 50-Koenig, with SCS, SS for SCS & SA 6 (pending)
Journal Page:
Title:
SCS SBs 46 & 50
Calendar Position:
Effective Date:
January 1, 2020

Current Bill Summary

SS/SCS/SBs 46 & 50 - This act modifies several provisions relating to taxation.

INDIVIDUAL INCOME TAX

Current law provides for a reduction in the top rate of income tax over a period of years from 6% to 5.5%, with each cut becoming effective if net general revenue collections meet a certain trigger, with an additional reduction in the top rate of tax of 0.4% to take effect in the 2019 calendar year. Beginning with the 2022 calendar year, this act provides for a further reduction in the top rate of tax. The amount of such reduction shall be determined by the Director of Revenue and shall be an amount that is substantially equivalent to the use tax collections made under the provisions of this act during the 2021 calendar year. (Section 143.011)

This act exempts interest received on deposits held at a federal reserve bank from Missouri adjusted gross income.

This provision is identical to a provision contained in SCS/SB 174 (2019), SS/HCS/HB 255 (2019), and SCS/HCS/HB 333 (2019).

This act provides that, for all tax years beginning on or after January 1, 2018, interest expenses paid or accrued in a previous taxable year, but allowed as a deduction in the current taxable year for federal tax purposes by reason of the carryforward of disallowed business interest provisions of federal law, shall be added to a taxpayer's federal adjusted gross income for the purposes of the calculation of Missouri adjusted gross income.

This act also provides that, for all tax years beginning on or after January 1, 2018, interest expenses paid or accrued in the current taxable year, but not allowed as a deduction for federal tax purposes, shall be subtracted from a taxpayer's federal adjusted gross income for the purposes of the calculation of Missouri adjusted gross income. A taxpayer may submit an amended return to adjust the taxpayer's federal adjusted gross income under the provisions of the act. (Section 143.121)

This provision is identical to SCS/SB 410 (2019) and to provisions contained in SCS/HCS/HB 703 (2019), SS/HCS/HB 255 (2019), SCS/HCS/HB 333 (2019), and HCS/SB 87 (2019).

CORPORATE TAXATION

This act adds "qualified air freight forwarders", as defined in the act, to the definition of "corporation" as a transportation corporation for the purposes of corporate income allocation. (Section 143.441)

This provision is identical to a provision contained in SS/HCS/HB 255 (2019) and SCS/HB 599 (2019).

This act makes technical corrections to the dates on which certain corporate income tax provisions take effect. (Sections 143.071, 143.451, and 143.461)

These provisions are identical to SCS/SB 151 (2019) and to provisions contained in SS/HCS/HB 255 (2019), SCS/HCS/HB 703 (2019), and SCS/HCS/HB 333 (2019).

Current law provides for a tax credit for banking institutions to compensate for franchise taxes paid by banking institutions, as well as a tax credit that may be claimed in the event the corporate franchise tax is repealed by the General Assembly. Because the corporate franchise tax was repealed beginning January 1, 2016, for all tax years beginning on or after January 1, 2020, this act disallows the tax credit designed to compensate for the franchise tax. (Section 148.064)

This provision is identical to SB 175 (2019) and HB 455 (2019), and to a provision contained in SS/HCS/HB 255 (2019), SCS/SB 174 (2019), and SCS/HCS/HB 333 (2019).

PAID TAX RETURN PREPARERS

This act establishes the "Taxpayer Protection Act".

For all tax years beginning on or after January 1, 2020, this act requires paid tax return preparers, as defined in the act, to sign any income tax return or claim for refund prepared by such paid tax return preparer and to provide such preparer's Internal Revenue Service preparer tax identification number.

Each failure to sign any income tax return or claim for refund, or to provide a preparer tax identification number, shall result in a fine of fifty dollars, not to exceed $25,000 per calendar year.

The Director of Revenue may file suit to enjoin a paid tax return preparer from engaging in certain actions, as described in the act. (Section 143.980)

This provision is identical to SCS/SB 118 (2019) and to a provision contained in SS/HCS/HB 255 (2019), SCS/SB 219 (2019), HCS/SB 87 (2019), HB 585 (2019), and HB 943 (2019).

USE TAX ECONOMIC NEXUS

Beginning January 1, 2021, this act provides that all vendors without a physical presence in this state making sales of tangible personal property for delivery into this state shall be required to collect and remit any use tax due as if such vendor maintained a physical presence in the state. This provision shall only apply to vendors who make at least $100,000 in gross revenue from the delivery of tangible personal property into this state in the previous or current calendar year.

No obligation to collect and remit use tax under this provision shall be applied prior to January 1, 2021.

The use tax collections made under the provisions of this act for the 2021 calendar shall be deposited in the State Disaster and Emergency Fund and Local Disaster and Emergency Fund, which is created by the act. All subsequent use tax collections shall be deposited in the General Revenue Fund as provided under current law. (Section 144.612)

This provision is substantially similar to a provision contained in SS/HCS/HB 255 (2019) and is similar to a provision contained in SCS/SB 189 (2019), HCS#2/HB 548 (2019), and HB 701 (2019).

DISASTER AND EMERGENCY FUNDS

This act creates the State Disaster and Emergency Fund, which may be used if the Governor reduces the expenditures of the state or any of its agencies below their appropriations, or when there is a budget need due to a disaster. A disaster may only be declared by the Governor or by a two-thirds majority vote of each house of the General Assembly.

This act also creates the Local Disaster and Emergency Fund. Upon a declaration of a disaster, counties, cities, and other municipalities may apply to the Department of Public Safety to receive grants from the Local Disaster and Emergency Fund. The Department may issue such a grant with the approval of the Governor if the grant request does not exceed the lesser of $10M or 5% of the fund balance. If the grant request exceeds such amount, the Department may only issue such grant with an appropriation from the State Disaster and Emergency Fund with the approval of a majority vote of each house of the General Assembly.

Twenty-five percent of use tax collections made under this act during the 2021 calendar year shall be deposited in the Local Disaster and Emergency Fund and shall stand appropriated without further legislative action to the Department of Public Safety for the purpose of providing grants to municipalities. Seventy-five percent of the use tax collections made under this act during the 2021 calendar year shall be deposited in the State Disaster and Emergency Fund. (Section 33.568)

This provision is substantially similar to SJR 26 (2019) and to a provision contained in SS/HCS/HB 255 (2019).

MARKETPLACE FACILITATORS

By January 1, 2021, marketplace facilitators, as defined in the act, that meet the use tax economic nexus threshold established in the act shall register with the Department to collect and remit use tax on sales made into the state through the marketplace facilitator's marketplace by or on behalf of a marketplace seller, as defined in the act. Such retail sales shall include those made directly by the marketplace facilitator as well as those made by marketplace sellers through the marketplace facilitator's marketplace.

Marketplace facilitators properly collecting and remitting use tax in a timely manner shall be eligible for any discount provided for under current law.

Marketplace facilitators shall provide purchasers with a statement or invoice showing that the use tax was collected and shall be remitted on the purchaser's behalf. (Section 144.752)

This provision is substantially similar to a provision contained in SS/HCS/HB 255 (2019), and is similar to a provision contained in SCS/SB 189 (2019) and HCS#2/HB 548 (2019).

SALES TAX ADMINISTRATION

This act provides that any local sales tax changes due to a boundary change shall take effect on the first day of the calendar quarter 120 days after the sellers receive notice of the change.

The effective date for the imposition, repeal, or rate change of each local sales and use tax shall be the first day of the calendar quarter at least 120 days after the sellers receive notice of the change. (Section 32.087)

This act makes changes to several sections of law relating to local sales taxes in order to make the administration of such taxes uniform. (Sections 66.601 to 94.705, 184.845, 221.407, 238.235, 238.410, 644.032)

This act modifies certain exemptions from state sales tax to make such exemptions uniform across the state and local sales tax bases. (Section 144.030)

The school and Show Me Green sales tax holidays are modified by repealing the ability for political subdivisions to opt out of the sales tax holidays, and by defining how the sales tax exemption applies to the purchase or return of certain items. (Sections 144.049 and 144.526)

This act relieves a purchaser from any penalties for failure to pay the proper amount of sales tax if the error was a result of erroneous information provided by the Director of Revenue. (Section 144.060)

A certified service provider, as defined in the act, shall not be certified unless it meets certain requirements relating to the security and privacy of purchasers' information, as described in the act. (Section 144.109)

This act provides uniform sourcing rules for all purchases made in this state. For purchases for which the location where the order is received by the seller and the purchaser receives the product are both in Missouri, the sale shall be sourced to the location where the order is received by the seller, as described in the act. For purchases for which the location where the order is received by the seller and the purchaser receives the product are in different states, the sale shall be sourced to the location where receipt by the purchaser occurs, as described in the act. All sales of motor vehicles, trailers, semi-trailers, watercraft, outboard motors, and aircraft shall be sourced to the address of the owner. For the lease or rental of tangible personal property that requires recurring periodic payments, the first periodic payment shall be sourced to where the order is received by the seller. All subsequent payments shall be sourced to the primary property location for the property, as described in the act. For the lease or rental of tangible personal property that does not require recurring periodic payments, the payment shall be sourced to the location where receipt by the purchaser occurs. (Sections 144.111 and 144.112)

The Director shall provide and maintain downloadable electronic databases at no cost to the user of the databases for taxing jurisdiction boundary changes, tax rates, and a taxability matrix detailing taxable property and services. Sellers and CSPs will be relieved from liability if they fail to properly collect tax based upon information provided by the Department. A certified service provider may utilize proprietary data, provided such data meets the standards provided for under the act. (Sections 144.123 and 144.124)

This act provides that a cause of action against a seller by a purchaser for a tax erroneously or illegally collected shall not accrue until the purchaser has provided written notice to a seller and the seller has had sixty days to respond. A seller shall be presumed to have a reasonable business practice if in the collection of such tax the seller uses a provider or a system certified by the Director of Revenue and has remitted all tax collected. (Section 144.190)

Monetary allowances from taxes collected shall be provided to certain sellers and certified service providers for collecting and remitting state and local taxes, as described in the act. (Section 144.140)

When an exemption is claimed by a purchaser, a seller shall be required to collect certain information, as described in the act.

A seller shall be relieved from collecting and remitting tax if it is determined that the purchaser improperly claimed an exemption. Relief from liability shall not apply to a seller who fraudulently fails to collect tax, or sellers who otherwise improperly accept an exemption certificate, as described in the act. (Section 144.212)

This act repeals a provision which requires the Director to establish brackets showing the amounts of tax to be collected on sales of specified amounts. Instead, the tax computation shall be carried to the third decimal place, and the tax shall be rounded to a whole cent using a method that rounds up to the next cent whenever the third decimal place is greater than four. (Section 144.285).

This act provides that all provisions of law with respect to sales into the state by out-of-state sellers apply to the Compensating Use Tax Law. (Section 144.600)

These provisions are identical to provisions contained in SS/HCS/HB 255 (2019), and are similar to provisions contained in HB 724 (2019), HB 908 (2019), SS#2/SCS/SBs 617, 611, & 667 (2018), HB 1479 (2018), HB 1699 (2018), HB 1836 (2018), HB 2162 (2018), HB 2269 (2018), HB 2691 (2018), SCS/SB 105 (2017), SCS/SB 795 (2016), HB 726 (2015), HB 727 (2015), HCS/HB 1356 (2013), HB 500 (2013), HB 422 (2013), HB 521 (2013), and HB 579 (2013).

LOCAL SALES AND USE TAXES

This act authorizes the City of Springfield to submit to the voters a transient guest tax not to exceed 7.5% of the charges per occupied room per night. Such tax shall be used solely for capital investments that can be demonstrated to increase the number of overnight visitors.

Upon approval by the voters, the city may adopt rules and regulations for the internal collection of the tax, or may enter into an agreement with the Department of Revenue for the collection of the tax.

The ballot language for such tax proposal shall include a statement indicating the highest and lowest current cumulative sales tax rate in such city, as well as a statement indicating the average sales tax rate in such city if the proposed tax is approved. (Section 94.842)

This provision is identical to SB 387 (2019) and HB 1073 (2019), and to a provision contained in SCS/HCS/HB 674 (2019) and SCS/HB 761 (2019).

This act adds the City of Portageville to the list of cities authorized to propose a sales tax for the purposes of improving public safety. Such sales tax, if approved by the voters, shall not exceed a rate of 0.5%.

The ballot language for such tax proposal shall include a statement indicating the highest and lowest current cumulative sales tax rate in such city, as well as a statement indicating the average sales tax rate in such city if the proposed tax is approved. (Section 94.900)

This provision is substantially similar to a provision contained in SB 21 (2019) and HCS/HB 532 (2019).

This act modifies ballot language required for the submission of a local use tax to voters by including language stating that the approval of the local use tax will eliminate the disparity in tax rates collected by local and out-of-state sellers by imposing the same rate on all sellers. (Section 144.757)

This provision is identical to a provision contained in SB 189 (2019), SS/HCS/HB 255 (2019), and HB 701 (2019).

This act provides that a sales tax imposed in certain museum and cultural districts shall be imposed at a rate not to exceed one percent, and that such districts shall be formed within fifteen, rather than five, years after a Presidential declaration establishing a disaster area in which the district is located. (Sections 184.815 and 184.845)

This provision is identical to a provision contained in SS/HCS/HB 255 (2019), and is substantially similar to HB 940 (2019) and SB 397 (2019).

EFFECTIVE DATE

This provisions of this act relating to sales tax administration, use taxes, and the income tax rate reduction shall become effective January 1, 2021. The remaining provisions shall become effective August 28, 2019.

JOSHUA NORBERG

SA 1 - THIS AMENDMENT MODIFIES PROVISIONS RELATING TO THE DEFINITION OF MARKETPLACE FACILITATORS.

SA 2 - THIS AMENDMENT MODIFIES THE METHOD BY WHICH USE TAX REVENUE IS DEPOSITED IN THE STATE AND LOCAL DISASTER AND EMERGENCY FUNDS.

SA 3 - THIS AMENDMENT REQUIRES THAT THE AMOUNT OF THE INCOME TAX CUT SHALL BE DETERMINED UNDER AN AGREEMENT BETWEEN THE DIRECTOR OF REVENUE AND THE STATE TREASURER.

SA 4 - THIS AMENDMENT ALLOWS CERTAIN TAXPAYERS TO PAY INCOME TAX DUE UNDER A PAYMENT PLAN.

SA 5 - THIS AMENDMENT PROVIDES FOR A REDUCED SALES TAX RATE ON FEMININE HYGIENE PRODUCTS, DIAPERS, AND INCONTINENCE PRODUCTS.