Missouri State Senate

Conference Committee Substitute

CCS/HCS/SB 662 - This act modifies provisions relating to taxation.

DETERMINATION OF MISSOURI TAXABLE INCOME FOR CORPORATIONS (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), SCS/HB 1865 (2014), HCS/SB 693 (2014), and HCS/SCS/SB 777 (2014).

NOTICE OF SALES TAX LAW CHANGES (144.021)

This act requires the Department of Revenue to notify sellers if there has been a change in the interpretation of sales tax laws that modifies which items of personal property or services are taxable. If the Department fails to notify a seller of the change, the seller will not be liable for the additional taxes to be collected until the seller is notified. The waiver of liability shall not apply to sellers that had prior notice or who have previously remitted tax on the property or service which is the subject of the change in interpretation.

This provision is similar to HB 2149 (2014).

ADVERTISING ASSUMPTION OF SALES TAX (144.080)

Currently, sellers are prohibited from advertising or holding out to customers that sales tax will be assumed or absorbed by the seller. This act removes this prohibition, provided that the seller states the amount of tax assumed or absorbed on the invoice or receipt for the sale.

This provision is similar to HB 1296 (2014). This provision is similar to a provision contained in HCS/SB 584 (2014), HCS/SB 607 (2014), and HCS/SS/SB 860 (2014).

SALES TAX EXEMPTION ON RIGHT OF FIRST REFUSAL (144.1030)

This act creates a sales tax exemption on right of first refusal for tickets at the Sprint Center in Kansas City.

This provision is identical to a provision in HCS/SB 693 (2014), HCS/SCS/SB 824 (2014), and HCS/SCS/SB 854 (2014).

MIKE HAMMANN

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