HCS/SB 112 - 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.
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 thirty-seven million dollars of new facility investment and create at least thirty 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. A project may 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 exemptions 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 five million dollars of new facility investment over a one year period and create at least five new jobs with wages of at least 150 percent of the county average wage over a two year period. A project may 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.
The data storage centers tax incentive will expire on September 1, 2019. The expiration will not impair any agreements or exemptions granted before the expiration.
These provisions are similar to 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
Currently, an applicant for this tax credit is 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. The applicant will be allowed to receive a tax credit equal to one hundred percent of the reasonable costs of demolition. Title insurance, surveying costs, and certain design costs are added to the types of eligible acquisition costs.
Currently, for a developer to be eligible for a tax credit under this program the redevelopment agreement between the developer and the municipal authority must prohibit the developer from redeveloping more than 75 percent of the area identified in the redevelopment plan. This act eliminates this restriction for projects in a specific type of redevelopment area.
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.
Currently, project areas must contain at least fifty acres and the average number of parcels per acre in an area must be four or more. This act requires projects in specific areas to contain at least 150 acres and eliminates the four parcels per acre requirement for such projects. An eligible project cannot include a parcel acquired from a municipal authority.
This act also allows a developer applying for the tax credit to file for the credit on a quarterly basis, rather than annually.
Currently, the aggregate amount of tax credits that may be authorized under the program is $95 million. This act allows for authorization of $95 million in tax credits after August 28, 2013. The cap on the amount of tax credits that can be issued under this program each year is increased from 20 to 30 million dollars.
The act divides the amount of tax credits that can be issued each year into two pools. If there is more than one applicant entitled to tax credits in that year, then half of the annual amount of money will go to projects in one pool and half for projects in the other pool. If the Department of Economic Development does not issue tax credits equal to all of each pool of money by December 31st, the other kind of projects can get the remaining money in the other pool.
Currently, the Department of Economic Development is prohibited from authorizing tax credits under this program after August 28, 2013. This act extends the amount of time the department can authorize tax credits under this program until August 28, 2019.
This act is substantially similar to SB 379 (2013), HB 423 (2013) and similar to HB 1130 (2012), HB 1723 (2012), and SB 783 (2012).
NEW MARKETS TAX CREDIT
Missouri's New Markets program provides a tax credit that can be taken against state income tax, bank tax, insurance premium tax, other financial institutions tax, and express companies tax by investors in funds established by specialized financial institutions called Community Development Entities (CDEs)for projects in Missouri.
Current law prohibits the authorization of investments that would receive tax credits under the New Markets tax credit program after June 30, 2010. Beginning on the effective date of the act, this act allows the Department of Economic Development to again authorize new qualified investments that would qualify for the New Markets tax credit.
This act also modifies certain terms of the New Markets tax credit program for investments made after the effective date of the act. Currently, the credit totals 39% of the amount invested by the taxpayer in the CDE as adjusted by state statute, and is claimed over a seven year period (0% for the first 2 years, 7% for the 3rd year, and 8% for the next 4 years). Under this act, the tax credit amount will be equal to 58% of the unadjusted amount invested in the CDE and the credits will be claimed over a seven year period (0% for the first 2 years, 11 % for the 3rd and 4th year, and 12% for the next 3 years). Currently, these tax credits are not transferable. This act does not prohibit the transfer of these tax credits, except that the credits are not saleable on the open market.
Currently, there is a $25 million fiscal year cap on utilization of the tax credit. This act reduces the cap to $15 million per fiscal year.
Current law requires CDEs to invest 85% of the capital into Missouri Qualified Businesses. This act requires that 150% of the capital that the CDE raises be invested in Missouri Qualified Businesses.
The Department of Economic Development is required to give the CDE six months after notice of noncompliance with certain terms of the program before the department recaptures the tax credits.
The act creates the New Markets Performance Guarantee Fund and requires CDEs that seek to have their investments designated as eligible for New Markets tax credits to pay one-half percent of the investment amount as a deposit that will be refunded to the CDE if the CDE invests 85% of the purchase price of the investment in qualified low-income community investments in Missouri within twelve months of the investment.
The act also prohibits CDEs from making certain distributions to their equity holders or making cash payments on long-term debt securities until the investment meets certain requirements and the Department of Economic Development approves the request. If the department denies the request unreasonably, the burden of proof is on the department in any administrative or legal proceeding. Fees from the investment fund are prohibited from being paid to a CDE until after the seventh anniversary of the initial investment.
The act establishes a sunset of six years after the effective date for the version of the New Markets tax credit created by this act.
These provisions contains an emergency clause and are similar to HB 227 (2013).
MISSOURI ANGEL INVESTMENT INCENTIVE ACT
Sections 348.273 & 348.274
This act creates the Missouri Angel Investment Incentive Act. The amendment 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. No tax credits shall be allocated or issued after December 31, 2019. 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 Department of Revenue, the Governor, the President pro tempore of the Senate, and the Speaker of the House of Representatives.
The Missouri Angel Investment Incentive Act expires on December 31, 2019.
These provisions are similar to SB 91 (2013), HB 182 (2013), HB 191 (2013), and HB 1593 (2012).
QUALIFIED RESEARCH EXPENSES TAX CREDIT
This act reauthorizes a tax credit for qualified research expenses. A taxpayer will be entitled to an income tax credit in an amount up to 6.5% of the qualified research expenses in excess of the prior three years' average qualified research expenses. The act limits the tax credit to certain research areas.
Applications must be made between January first and July first of the calendar year following the year in which the expenses occurred. The Department of Economic Development must act on applications between August first and August fifteenth after the application is filed.
Unclaimed portions of the tax credit may be transferred during the years 2014 to 2020. A $10 million per calendar year cap is set for the tax credit. The act establishes a calculation to reduce the amount applicants will receive if the number of eligible claims exceeds the annual cap. No one taxpayer may be issued more than 30% of the tax credits authorized in a calendar year.
No tax credits may be authorized after December 31, 2020.
These provisions are similar to SB 333(2013), HB 389 (2013), SB 252 (2011), and SB 353 (2009).
HA #1 - ELIMINATES FURTHER AUTHORIZATIONS OF THE PRODUCTION PORTION OF THE AFFORDABLE HOUSING ASSISTANCE TAX CREDIT, THE DEVELOPMENT TAX CREDIT, NEIGHBORHOOD PRESERVATION TAX CREDIT, AND THE SELF-EMPLOYED HEALTH INSURANCE TAX CREDIT. THE ACT ALSO MODIFIES PROVISIONS RELATING THE DISTRESSED AREAS LAND ASSEMBLAGE TAX CREDIT, DATA STORAGE CENTERS, BROWNFIELD REMEDIATION TAX CREDIT, AND CREATES THE MISSOURI EXPORT INCENTIVE ACT.
HA #2 - EXTENDS THE SUNSET ON THE WOOD ENERGY PRODUCERS TAX CREDIT TO JUNE 30, 2019, AND SETS A FISCAL YEAR CAP OF $3.5 MILLION.
HA #3 - PROHIBITS JOBS RELOCATION TO JACKSON, PLATTE, CLAY, AND CASS COUNTIES FROM KANSAS TO QUALIFY FOR INCENTIVES UNDER CERTAIN PROGRAMS IF KANSAS PASSES SIMILAR LEGISLATION OR AN EXECUTIVE ORDER.
HA #4 - MODIFIES PROVISIONS RELATING TO HISTORIC PRESERVATION TAX CREDITS. THE AMENDMENT CAP LARGE PROJECTS AT $90 MILLION PER FISCAL YEAR AND SMALL PROJECTS AT $10 MILLION PER FISCAL YEAR.
HA #5 - MODIFIES PROVISIONS RELATING TO LOW-INCOME HOUSING TAX CREDITS. THE AMENDMENT CAPS 9% PROJECTS AT $130 MILLION FOR FY 2014 AND PHASES IT DOWN UNTIL IT IS $110 MILLION FOR FY 2018 AND ALL FISCAL YEARS THEREAFTER. THE AMENDMENT CAPS 4% PROJECTS AT $4 MILLION PER FISCAL YEAR BEGINNING FY 2015.
HA #6 - MODIFIES PROVISIONS RELATING TO THE MISSOURI ANGEL INVESTMENT INCENTIVE TAX CREDIT. THE MISSOURI TECHNOLOGY CORPORATION'S ROLE IS REPLACE WITH SMALL BUSINESS TECHNOLOGY DEVELOPMENT CENTERS.
HA #7 - INCREASES THE FISCAL YEAR CAP ON PREGNANCY RESOURCES CENTER CONTRIBUTIONS TAX CREDIT FROM $2 MILLION TO $2.5 MILLION.