SB 174 Reduces the corporate income tax rate and modifies provisions relating to use tax nexus
Sponsor: Parson
LR Number: 1031S.02C Fiscal Note available
Committee: Ways and Means
Last Action: 5/17/2013 - S Informal Calendar S Bills for Perfection--SB 174-Parson, with SCS Journal Page:
Title: SCS SB 174 Calendar Position:
Effective Date: August 28, 2013

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Current Bill Summary


SCS/SB 174 - Currently, corporate income is taxed at a rate of 6.25%. This act reduces the rate to 6%, beginning January 1, 2014.

This act modifies provisions relating to the Sales Tax Law and the Compensating Use Tax Law. The term "engaging in business" in the Sales Tax Law is expanded to include the meanings given to "engages in business in this state" and "maintains a business in this state" as they are defined in the Compensating Use Tax Law.

This act makes agreements between the executive branch and any person that exempts them from collection of sales and use tax void unless approved by both chambers of the General Assembly.

The definition of "engages in business activities within this state" in the Compensating Use Tax Law is modified. The use of media to exploit Missouri's market will no longer make a vendor meet the definition. Being controlled by the same interests which control a seller engaged in a similar line of business in this state will also no longer meet the definition.

Under the Compensating Use Tax Law, a presumption is created that a vendor engages in business activities within this state if any person with a substantial nexus to Missouri performs certain activities in relation to the vendor within this state. The presumption may be rebutted by showing that the person's activities are not significantly associated with the vendor's ability to maintain a market in Missouri.

A second presumption is created that a vendor engages in business activities within this state if the vendor enters into an agreement with a resident of Missouri to refer customers to the vendor and the sales generated by the agreement exceeds $10,000 in the preceding twelve months. This presumption may be rebutted by showing that the Missouri resident did not engage in activity within Missouri that was significantly associated with the vendor's market in Missouri in the preceding twelve months.

The definition of "maintains a place of business in this state" in the Compensating Use Tax Law is modified to remove common carriers from its provisions.

Currently, there is an exemption from the definition of vendor under the Compensating Use Tax Law for vendors whose gross receipts are less than certain amounts, do not maintain a place of business in Missouri, and have no selling agents in Missouri. This act removes the exception.

The provisions relating to the Sales Tax Law and the Compensating Use Tax Law are similar to provision contained in SS/HB 253 (2013), HCS/HBs 521 & 579 (2013), HB 578 (2013), HB 1042 (2013), HCS/SB 23 (2013), and SS#2/SCS/SBs 26, 11 & 31 (2013).

MIKE HAMMANN