SB 777 Modifies provisions relating to taxation, penalties for ordinance violations, economic development, and motor vehicle sales
Sponsor: Nieves
LR Number: 5406H.06C Fiscal Note available
Committee: Ways and Means
Last Action: 5/16/2014 - S Calendar S Bills with H Amendments--SCS for SB 777-Nieves, with HCS#2, as amended Journal Page:
Title: HCS#2 SCS SB 777 Calendar Position: 8
Effective Date: August 28, 2014
House Handler: Torpey

Full Bill Text | All Actions | Amendments/CCRs/CCSs | Available Summaries | Senate Home Page | List of 2014 Senate Bills

Current Bill Summary


HCS#2/SCS/SB 777 - This act modifies provision relating to taxation, ordinance violations, Sunday sales of motor vehicles, and economic development.

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/HB 1501 (2014), a provision of SB 46 (2013), SCS/SB 584 (2012), SB 8 (1st Ex. Session 2011), SB 217 (2011), and SB 868 (2010).

INCENTIVES FOR INTERSTATE BUSINESS RELOCATION

(Section 135.1670)

This act prohibits issuance of incentives under the BUILD program, the new or expanded business facilities program, the Urban Enterprise Loan program, or the Missouri Works program for businesses that relocate from certain counties in Kansas to certain counties in Missouri. The act is contingent upon the Director of the Department of Economic Development certifying that Kansas has passed similar legislation or issued an executive order with a similar prohibition on incentives for businesses to relocate from such Missouri counties to such Kansas counties. Written affirmation of the Director's certification must be made by the Governor, Speaker of the House of Representatives, and the President Pro Tempore of the Senate before the act will take effect.

If the Director certifies that Kansas has resumed offering incentives for businesses to relocate from Missouri to Kansas, the prohibited incentive can resume being offered for business to relocate from Kansas to Missouri. The incentives shall become prohibited again if Kansas ceases offering incentives for business to relocate from Missouri.

The prohibition on incentives for business relocation shall not apply to Missouri businesses that have been awarded incentives or had incentives reserved on their behalf before the prohibition takes effect.

The act only applies to business relocating from Douglas, Johnson, Miami, or Wyandotte counties in Kansas to Cass, Clay, Jackson, or Platte counties in Missouri.

This act will expire on August 28, 2016, if the provisions of the act prohibiting incentives are not in effect at such time. If the act does not expire on August 28, 2016, the act will expire on August 28, 2020.

This provision is similar to SB 635 (2014), HB 1515 (2014) and HB 1646 (2014).

RESIDENTIAL FACILITIES FOR THE AGED PROPERTY TAX EXEMPTION (Section 137.100)

This act specifies that property used as residential facility for the aged which is owned by not-for-profit organization will be exempt for property taxes under the existing exemption for charitable organizations .

This provision is identical to HB 2035 (2014). This provision is identical to a provision in HCS/SB 693 (2014) and HCS/SCS/SB 854 (2014).

DETERMINATION OF MISSOURI TAXABLE INCOME FOR CORPORATIONS

(Section 143.451)

Currently, in determining what portion of a corporation's income is taxable in Missouri, the business may use a method whereby the ratio of instate sales to total sales is multiplied by the net income. A method for determining whether sales of tangible property are to be considered instate is already established in current law. This act specifies a process for all other sales.

For sales of real property or rentals of tangible personal property, the portion of the property sold or rented that is located in this state will be considered an instate sale. For sales of service, the portion of the benefits delivered to purchasers in this state will be considered an instate sale.

For rentals or licenses of intangible property, the portion used in this state by the rentee or licensee will be considered an instate sale. Intangible property used for marketing will be considered used in this state if the good or service being marketed is purchased by a consumer in this state. Franchise fees or royalties for intangible property are considered used in this state if the franchise is located in this state.

For sales of intangible property, the portion of the sale used in this state will be considered an instate sale. If the sale is for the right to conduct business activity in a certain geographic area, the sale will be instate if the geographic area is in this state. If receipts for sales of intangible property are dependent on use or productivity, such sale shall be considered a lease or rental of intangible property. All sales of intangible property other than the right to conduct business in a specific area or sales with receipts contingent on productivity or use will be excluded from the sales factor when determining corporate income tax.

If it can not be determined or reasonably approximated that a sale occurs in this state, such sale shall excluded from the sales factor for corporate income taxation.

This provision is similar to HB 2215 (2014). This provision is similar to a provision in SCS/HCS/HB 1296 (2014), SS/SCS/HB 1865 (2014), CCS/SCS/SB 584 (2014), CCS/SCS/SB 612 (2014), CCS/HCS/SB 662 (2014), and CCS#2/HCS/SB 693 (2014).

SALES TAX EXEMPTIONS FOR AIRCRAFT

(Section 144.030)

Currently, there is a sales and use tax exemption for replacement parts and equipment used on aircraft. This exemption is set to expire January 1, 2015. This act extends the exemption indefinitely. This provision is identical to HB 2029 (2014).

The act also create a sales and use tax exemption for aircraft sold to non-Missouri residents. To be eligible for the exemption, the aircraft cannot be based in the state and must be removed from the state within 10 days of the later of transfer of title or a return to service associated with a transfer of title. This provision is identical to SB 958 (2014).

SALES TAX EXEMPTION FOR USED MANUFACTURED HOMES

(Section 144.044)

This act creates a sales and use tax exemption for used manufactured homes. This provision is substantially similar to SB 860 (2014) and HB 1765 (2014). This provision is similar to a provision in CCS/HCS/SB 584 (2014) and CCS#2/HCS/SB 693 (2014).

RETAIL SALES LICENSES

(Sections 144.083 & 144.087)

This act adds use tax to the types of taxes that a business must be not be delinquent on to receive or have renewed an local occupation license or a state license required to sell goods. Beginning in 2018, a statement of no income tax due shall also be required before issuance of such licenses. This provision is similar to HB 1678 (2014), a provision in HB 1677 (2014), and a provision in HCS/HB 1725 (2014).

Beginning in 2015, business will no longer be required to file a bond to receive a retail sales license. This provision is similar to HB 1725 (2014).

PENALTIES FOR ORDINANCE VIOLATIONS

(Section 546.902)

Currently, municipalities in St. Louis County may enact as penalties for ordinance violations a fine of up to $1,000, imprisonment up to 3 months, or both. This act gives fourth class cities in Jackson county the same authority.

This provision is similar to HB 1829 (2014) and a provision in HCS/HB 2112 (2014).

SUNDAY SALES OF MOTORCYCLES AND POWERSPORT VEHICLES (578.120)

Currently, it is a class C misdemeanor to sell motor vehicles on Sunday. This act exempts motorcycles and certain powersport vehicles from prohibition on Sunday sales.

This provision is similar to a provision in SB 791 (2014). This provision is similar to a provision in SS/SCS/HCS/HB 1124 (2014), SS/SCS/HCS/HBs 1735 & 1618 (2014), HCS/SCS/SB 672 (2014), HCS/SB 696 (2014), and HCS/SS/SCS/SB 707 (2014).

MISSOURI STARTUP CLOUD PROGRAM

(Section 620.1650)

This act creates the Missouri Startup Cloud program. The Department of Economic Development is required to maintain a website or contract with a website development company to create a business financing provider exchange website. Business financing providers will be allowed to post financial products or services that assist Missouri businesses free of charge. The website must explain the benefits of starting, expanding, or relocating a company to Missouri. Companies contracted with the Department to maintain the website will receive no compensation but may keep any advertising revenue.

This provision is similar to HB 1559 (2014).

MISSOURI INTERNATIONAL BUSINESS ADVERTISING FUND

(Section 620.1915)

This act creates the Missouri International Business Advertising Fund. The fund will consist of appropriated moneys, gifts, contributions, grants and bequests. Moneys in the fund will be used for advertising to attract international businesses to Missouri. The fund will be administered by the Missouri Small Business Technology and Development Center.

This provision is similar to HB 1055 (2014), HCS/HB 79 (2013), a provision in HCS/HB 630 (2013), and HB 1801 (2012).

BRING JOBS HOME ACT (Section 620.2425)

This act establishes the Bring Jobs Home Act. An income tax credit is created in an amount equal to 20% of expenses associated with moving all or part of a business from outside of Missouri to a location in Missouri. The number of full time employees of the business in the tax year the business claims the credit must exceed the number full-time employees of the business in the tax year before the expenses were incurred. The credit may be taken in the tax year the relocation is completed or in the following tax year.

The total amount of tax credits that may be issued under this act is $10 million per year. Taxpayers receiving a credit under this act will be ineligible for any other tax credit for the same expenses. Taxpayers that eliminate a business unit within ten year of receiving a tax credit under this act must repay the amount of tax credits received. The act sunsets on August 28, 2020.

This act is similar to HB 1089 (2014) and HB 850 (2013).

ACCELERATED TECHNOLOGY EDUCATION (Section 620.2650)

This act creates the Committee for Entrepreneurs in the Department of Economic Development. The Committee is determine criteria and approve grant applications to institutions for development of an accelerated technology education program. Subject to appropriations, the Committee may award up to ten grant of $15,000 each. This provision has an emergency clause.

This provision is similar to HB 1811 (2014).

MIKE HAMMANN

HA#1 - REMOVES PROVISIONS RELATING TO A DATA STORAGE CENTERS TAX INCENTIVE, PROHIBITION ON TAX INCENTIVES FOR INTERSTATE BUSINESS RELOCATION, PROPERTY TAX EXEMPTION FOR RESIDENTIAL FACILITIES FOR THE AGED, RETAIL SALES LICENSES, AND SUNDAY SALES OF MOTORCYCLES AND POWERSPORT VEHICLES..

HA#2 - EXPANDS THE SALES TAX HOLIDAY FOR SCHOOL SUPPLIES TO INCLUDE GRAPHING CALCULATORS.