SS/HCS/HB 255 - 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 calendar year following the calendar year in which the final 0.1% tax rate reduction is made under current law, this act further reduces the top rate of tax by 0.11%. (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), SCS/SBs 46 & 50 (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/SCS/SBs 46 & 50 (2019), SCS/HCS/HB 333 (2019), and HCS/SB 87 (2019).
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/SCS/SBs 46 & 50 (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 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 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 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 and 2022 calendar years that are above the baseline use tax collections shall be deposited in the State Disaster and Emergency Fund and Local Disaster and Emergency Fund. All subsequent use tax collections shall be deposited in the General Revenue Fund as provided under current law.
Baseline use tax collections for the 2021 calendar year are defined as the amount of use tax collected during fiscal year 2020, plus four percent. Baseline use tax collections for the 2022 calendar year are defined as the baseline use tax collections for the 2021 calendar year, plus four percent. (Section 144.612)
This provision is substantially similar to a provision contained in SS/SCS/SBs 46 & 50 (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 and 2022 calendar years 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 and 2022 calendar years 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/SCS/SBs 46 & 50 (2019).
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 sales and 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. Sales made through a marketplace facilitator shall be deemed to be consummated at the location to which the item is shipped or delivered, or at which possession is taken by the purchaser.
Marketplace facilitators shall report and remit sales and use tax collected under this act on a separate form developed by the Department. Marketplace facilitators properly collecting and remitting sales and 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 sales and use tax was collected and shall be remitted on the purchaser's behalf.
No class action shall be brought against a marketplace facilitator in any court in this state on behalf of purchasers arising from or in any way related to an overpayment of sales or use tax collected on retail sales facilitated by a marketplace facilitator, regardless of whether that claim is characterized as a tax refund claim.
If the Department audits a marketplace facilitator, it shall only audit such facilitator and not the marketplace sellers on behalf of whom the marketplace facilitator facilitates sales.
Marketplace facilitators may apply to the Department for relief from liability for the failure to collect and remit the correct amount of sales or use tax on retail sales facilitated for marketplace sellers under certain circumstances, as described in the act. Relief from liability shall be a percentage of the sales and use tax collected by the marketplace facilitator, with such percentage being four percent for sales made during the 2021 calendar year, two percent for sales made during the 2022 calendar year, one percent for sales made during the 2023 calendar year, and zero percent thereafter.
The Department may grant a waiver from the requirements of the act if a marketplace facilitator demonstrates to the satisfaction of the Department that all of its marketplace sellers are already registered to collect and remit sales and use tax. If such waiver is granted, the sales or use tax due shall be collected and remitted by the marketplace seller. (Section 144.752)
This provision is substantially similar to a provision contained in SS/SCS/SBs 46 & 50 (2019) and are similar to a provision contained in 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)
Beginning October 1, 2019, this act provides that the state sales tax rate imposed on retail sales of feminine hygiene products shall not exceed the state sales tax rate imposed on the retail sale of food. (Section 144.016)
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)
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. Certified service providers, sellers, and marketplace facilitators may utilize proprietary data, provided the Director certifies that 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)
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 similar to provisions contained in SS/SCS/SBs 46 & 50 (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), and HCS/HB 1356 (2013), HB 500 (2013), HB 422 (2013), HB 521 (2013), and HB 579 (2013).
LOCAL SALES AND USE TAXES
For all tax years beginning on or after January 1, 2021, this amendment places a limit on the total combined rate of local sales taxes by providing that the total combined rate of local sales taxes imposed by a taxing entity that is an incorporated city, town, or village shall not exceed 4.5%. The total combined rate of local sales taxes imposed by a county shall not exceed 3.25%. For all other taxing jurisdictions, the total combined rate of sales taxes in any given taxing jurisdiction shall not exceed 3.25%. Such limits shall not apply to transient guest taxes or convention and tourism taxes.
In any election in which more than one sales tax levy is approved by the voters, and the passage of such levies results in a combined rate of sales tax in excess of the limits provided under the act, only the sales tax levy receiving the most votes shall become effective. (Section 32.087)
This provision is substantially similar to a provision contained in SCS/SB 52 (2019) and SB 149 (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/SCS/SBs 46 & 50 (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. (Section 184.815 and 184.845)
This provision is identical to a provision contained in SS/SCS/SBs 46 & 50 (2019), and is substantially similar to HB 940 (2019) and SB 397 (2019).
MISSOURI WORKS TRAINING PROGRAM
This act modifies several provisions relating to the Missouri Works Training Program.
This act renames the program the Missouri One Start Program. Current law allows administrative expenses equal to fifteen percent of total training costs. This act limits such expenses to a reasonable amount determined by the Department of Economic Development. (Section 620.800)
In promulgating rules and regulations governing the Missouri One Start Training Program, this act requires the Department to consider such factors as the potential number of new jobs to be created, the amount of new capital investment in new facilities and equipment, the significance of state benefits to the qualified company's decision to locate or expand in Missouri, the economic need of the affected community, and the importance of the qualified company to the economic development of the state.
This act allows the Department to require a qualified business to repay all benefits if such business fails to maintain the new or retained jobs within five years of approval of benefits or if such business leaves the state within five years of approval of benefits.
This act allows the Department to contract with other entities, including businesses, industries, other state agencies, and political subdivisions of the state for the purpose of implementing a training project under the program. (Section 620.803)
Upon appropriation of funds to the Missouri One Start Job Development Fund, this act allows a local education agency to petition the Department to utilize the Fund to create or improve training facilities, equipment, staff, expertise, programming, and administration. The Department may award moneys from the Fund for reimbursement of training project costs and services as it deems necessary. (Section 620.806)
This act gives the Department the discretion to determine the appropriate amount of funds to allocate to a training project from the Missouri One Start Community College New Jobs and Retained Jobs Training funds.
Any agreement or obligation entered into by the Department that was made under the provisions of the Missouri Works Training Program prior to the effective date of this act shall remain in effect according to the provisions of such agreement or obligation. (Section 620.809)
These provisions are identical to provisions contained in SB 184 (2019), as amended, and HCS/SB 68 (2019), and are substantially similar to HCS/HB 469 (2019).
The Missouri Works program offers companies tax credits and the ability to retain withholding taxes for meeting certain job creation thresholds. This act allows the Department of Economic Development to offer certain companies tax credits in an amount equal to or less than nine percent of new payroll if such company creates ten or more new jobs and the average wage of new payroll equals or exceeds ninety percent of the county average wage. The Department of Economic Development shall require financial guarantee provisions in an agreement with a qualified company for tax credits authorized under this act. (Section 620.2010)
Current law provides that the Department shall issue tax credits to a qualified company after such company has met the job creation and county average wage requirements. This act allows the tax credits authorized under this act to be issued following the qualified company's acceptance of the Department's proposal and the agreement required under current law.
The Missouri Works program currently has a limit of $116 million on the amount of tax credits that may be issued during a fiscal year. For all fiscal years beginning on or after July 1, 2020, this act reduces such limit to $106 million. An additional $10 million in tax credits may be authorized provided that such tax credits are authorized for the purpose of the completion of infrastructure projects, as defined in the act, directly connected with the creation or retention of jobs under the Missouri Works program.
For all fiscal years beginning on or after July 1, 2020, this act establishes a limit of $75 million on the total amount of withholding taxes that may be authorized for retention by qualified companies with more than fifty employees. Withholding retention authorized for qualified companies with less than fifty employees shall not be subject to such limitation. (Section 620.2020)
These provisions are substantially similar to provisions contained in HCS/SB 68 (2019) and SS/SCS/SB 56 (2019).
CREATION OF BENEFIT CORPORATIONS
Under this act, any corporation incorporated under the general corporation laws of Missouri may elect to become a benefit corporation by amending its articles of incorporation to indicate that it is a benefit corporation.
In order to be a benefit corporation, the corporation must create general public benefit, being defined as a material positive impact on society and the environment, taken as a whole, from the business and operations of a benefit corporation, assessed taking into account the impacts of the benefit corporation as reported against a third-party standard. Benefit corporations may additionally choose to create specific public benefits. (Sections 351.1409 TO 351.1415)
The members of the board of directors of the benefit corporation or any committee thereof shall consider, among other things, the effects of any action or inaction upon the shareholders of the corporation, the employees of the corporation, and the local and global environment. However, such persons are not required to give priority to any person or group over another person or group unless specifically required by the corporation’s articles of incorporation.
Directors and officers of a benefit corporation shall not be personally liable for monetary damages for any action or inaction taken in the course of performing their duties as a director or officer if he or she was not interested with respect to the action or inaction. Further, directors and officers shall not have a duty to any person that is a beneficiary of the general public benefit or special public benefit of the corporation. (Sections 351.1418 and 351.1424)
Each benefit corporation may have a benefit director who is responsible for preparing an annual report addressing whether the benefit corporation acted in accordance with its general public benefit purpose and any adopted specific public benefit purposes. Additionally, the report shall address whether the directors and officers of the corporation acted in accordance with their required statutory roles.
A benefit director shall not be personally liable for an act or omission in his or her capacity as benefit director. Any act or inaction shall only be considered an act or inaction in the person's capacity as benefit director. (Section 351.1421)
Each benefit corporation may have a benefit officer who shall, among other designated responsibilities, prepare an annual benefit report. Each report shall include, among other things, the following information:
• A narrative description of the ways in which the corporation has pursued, created, or has been hindered in the pursuit or creation of the general public benefit purpose or specific public benefit purpose;
• An assessment of the overall social and environmental performance of the benefit corporation against the third-party standard.
Each shareholder of the corporation shall receive the annual benefit report within 120 days of the end of the fiscal year or at the same time that the corporation delivers any other annual report to its shareholders. The report shall also be publicly available on its website, if there is one. A copy of the report shall additionally be filed with the Secretary of State, which shall charge a fee of $45 for such filing. (Sections 351.1427 to 351.1433)
The act provides for benefit enforcement proceedings whereby certain entities may make a claim against the benefit corporation for violation of any obligation, duty, or standard required by law, or for failure to pursue or create a general public benefit or specific public benefit. Only the following entities may commence a benefit enforcement proceeding:
• The benefit corporation itself;
• A person or group of persons that owned at least 2% of the total number of shares of a class or series outstanding at the time of the act or inaction;
• A director of the benefit corporation;
• A person or group of persons that owned at least 5% of the outstanding equity interests in an entity of which the benefit corporation is a subsidiary at the time of the act or inaction; or
• Any person specified in the articles of incorporation or bylaws of the benefit corporation. (Section 351.1435)
These provisions are identical to SB 754 (2018), are substantially similar to HB 2669 (2018) and SB 467 (2017), and are similar to HB 1956 (2014).
MEDICAID MANAGED CARE REIMBURSEMENT ALLOWANCE
This act modifies the Medicaid managed care reimbursement allowance by applying it, beginning July 1, 2020, to all managed care organizations in Missouri, including those providing benefits to MO HealthNet managed care participants. The reimbursement allowance may be imposed on the basis of revenue or enrollment and may impose differential rates on Medicaid and commercial businesses; provided that the commercial rate shall not exceed $1.80 per member per month. The Department of Social Services shall recognize the cost of the reimbursement allowance as a cost in calculating actuarially sound reimbursement rates.
This provision is identical to a provision contained in SCS/SB 29 (2019) and is similar to provisions contained in HCS/SS/SCS/SB 775 (2018).
The 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.
SA 1 - THIS AMENDMENT MODIFIES PROVISIONS RELATING TO THE ASSESSMENT OF CERTAIN TAX-EXEMPT PROPERTIES.
SA 2 - THIS AMENDMENT MODIFIES PROVISIONS RELATING TO THE NEW BUSINESS FACILITY TAX CREDIT.
SA 3 - THIS AMENDMENT PROVIDES THAT THE OFFICES OF PRESIDENT, CHIEF EXECUTIVE OFFICER, AND CHAIRMAN OF THE BOARD OF DIRECTORS OF A CORPORATION MAY EACH BE HELD BY DIFFERENT PERSONS, UNLESS OTHERWISE PROVIDED BY THE ARTICLES OF INCORPORATION OR BYLAWS.