HB 66 Modifies provisions relating to taxation

     Handler: Koenig

Current Bill Summary

- Prepared by Senate Research -


SS/HCS/HB 66 - This act modifies several provisions relating to taxation.

USE TAX MAPPING

Current law requires the Department of Revenue to create and maintain a mapping feature on its website that displays various sales tax information. This act requires such mapping feature to include use tax information. Political subdivisions collecting a use tax shall send such data to the Department of Revenue by January 1, 2022, and the Department shall implement the mapping feature using the use tax data by July 1, 2022.

If the boundaries of a political subdivision in which a sales or use tax has been imposed shall thereafter be changed or altered, the political subdivision shall forward such changes to the Department, as described in the act. (Section 32.310)

This provision is identical to a provision contained in SB 872 (2020) and HB 2172 (2020), and is substantially similar to a provision contained in SS#2/SCS/SB 648 (2020), SB 805 (2020), SCS/HB 1700 (2020), and HB 1895 (2020).

VIDEO SERVICE PROVIDER FEES

This act modifies provisions relating to communications services offered in political subdivisions.

The act modifies the definition of "gross revenues" for provisions of law relating to video service providers.

Under the act, a franchise entity may collect a video service provider fee equal to not more than 5% of the gross revenues of a video service provider providing service in the geographic area of such franchise entity. The fee shall be phased out as follows:

• Beginning August 28, 2023, 4.5% of gross revenues;

• Beginning August 28, 2024, 4% of gross revenues;

• Beginning August 28, 2025, 3.5% of gross revenues;

• Beginning August 28, 2026, 3% of gross revenues; and

• Beginning August 28, 2027, and continuing thereafter, 2.5% of gross revenues.

Currently, video service providers may identify and collect the amount of the video service provider fee as a separate line item on subscriber bills. Under this act, the fee shall be identified and collected as a separate line item.

The act also creates the Task Force on the Future of Right-of-Way Management and Taxation consisting of 16 members as set forth in the act. The purpose of the Task Force is to study best methods for right-of-way management, taxation of video services, and the future revenue needs of municipalities and political subdivisions as such revenue relates to video services.

The Task Force shall compile a report of its activities for submission to the General Assembly. The report shall be submitted no later than December 31, 2023, and shall include any recommendations which the Task Force may have for legislative action. The Task Force shall expire on December 31, 2023. (Sections 67.2677 to 67.2720)

This provision is identical to SB 163 (2021) and is similar to SCS/SB 526 (2020) and HB 2091 (2020).

TRANSIENT GUEST TAXES

This act authorizes the City of Springfield to submit to the voters a transient guest tax not to exceed 2.5% of the charges per occupied room per night. Such tax shall be used solely for capital improvements that can be demonstrated to increase the number of overnight visitors.

Upon approval by the voters, the city may adopt rules and regulations for the internal collection of the tax, or may enter into an agreement with the Department of Revenue for the collection of the tax. The vote shall occur on a general election day. (Section 94.842)

This provision is identical to a provision contained in SB 47 (2021) and is substantially similar to SB 387 (2019) and HB 1073 (2019), and to a provision contained in SS#2/SCS/HCS/HB 1854 (2020), HCS/SS#2/SB 704 (2020), HCS/SS/SCS/SB 570 (2020), HCS/SS/SCS/SB 594 (2020), HCS/SCS/SB 616 (2020), HCS/SCS/SB 725 (2020), SCS/SB 770 (2020), SS/SCS/SBs 46 & 50 (2019), SCS/HCS/HB 674 (2019), SCS/HB 761 (2019), and SCS/HB 1700 (2020).

TAXATION OF AIRCRAFT

Current law requires aircraft which are at least twenty-five years, used solely for noncommercial purposes, and operated less than fifty hours per year to be assessed at five percent of true value. This act changes the operating hours requirement to two hundred hours. (Section 137.115)

This provision is identical to a provision contained in HCS/HB 555 (2021), HCS/SB 686 (2020), HCS/SB 782 (2020), HCS/SCS/SB 867 (2020), and HCS/HB 1333 (2020), and is substantially similar to HB 1284 (2020) and HB 1205 (2019).

INDIVIDUAL INCOME TAX

Current law provides for a reduction in the top rate of income tax of 0.5% phased-in over a period of years in 0.1% increments, with each cut becoming effective if net general revenue collections meet a certain trigger. This act adds three additional 0.1% reductions for a total reduction in the top rate of tax of 0.8%. (Section 143.011)

This act also establishes the Missouri Working Family Tax Credit Act.

Beginning with the 2023 calendar year, this act creates a tax credit to be applied to a taxpayer's Missouri income tax liability after all reductions for other credits for which the taxpayer is eligible have been applied. The tax credit shall not exceed the amount of the taxpayer's tax liability, and shall not be refundable. The amount of such tax credit shall be a percentage of the amount of a taxpayer's federal earned income tax credit as such credit existed as of January 1, 2021. The initial percentage shall be 10% and may be increased to 20% of the amount of a taxpayer's federal earned income tax credit. The initial percentage claimed and any increase in the percentage claimed shall only occur if the amount of net general revenue collected in the previous fiscal year exceeds the highest amount of net general revenue collected in any of the three fiscal years prior to such fiscal year by at least $150 million.

The Department of Revenue shall determine whether a taxpayer who did not apply for the tax credit established by this act is eligible and shall notify such taxpayer of his or her potential eligibility.

The Department shall prepare an annual report regarding the tax credit established by this act containing certain information as described in the act. (Section 143.177)

This provision is substantially similar to SB 183 (2019), HB 291 (2019), HB 1194 (2019), SB 615 (2018), SB 197 (2017), SB 342 (2017), HCS/HB 109 (2017), and to a provision contained in SB 248 (2021), SCS/SB 52 (2019), HB 846 (2019), SS#2/SCS/SBs 617, 611, & 667 (2018) and HCS/HB 1605 (2016), and is similar to HB 2154 (2016), SB 1018 (2016), SB 40 (2015), SB 687 (2014), HB 1120 (2014), HB 895 (2013), HB 1606 (2012), HB 581 (2011), and HB 1915 (2010).

USE TAX ECONOMIC NEXUS

This act modifies the definition of "engaging in business activities within this state" to include vendors that had cumulative gross receipts of at least $100,000 from the sale of tangible personal property for the purpose of storage, use, or consumption in this state in the previous twelve-month period, as described in the act. Vendors meeting such criteria shall be required to collect and remit the use tax as provided under current law. (Section 144.605)

This provision is identical to a provision contained in SS#2/SCS/SB 648 (2020), SCS/SB 529 (2020), and SCS/HB 1700 (2020), and is substantially similar to a provision contained in SB 659 (2020), SB 805 (2020), SB 872 (2020), HCS#2/HB 1957 (2020), HB 1967 (2020), HB 2172 (2020), and HB 2238 (2020).

MARKETPLACE FACILITATORS

Beginning January 1, 2023, marketplace facilitators, as defined in the act, that engage in business activities within the state shall register with the Department to collect and remit use tax on sales delivered 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.

Marketplace facilitators shall report and remit use tax collected under this act as determined by the Department. Marketplace facilitators properly collecting and remitting 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 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.

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 2023 calendar year, two percent for sales made during the 2024 calendar year, one percent for sales made during the 2025 calendar year, and zero percent thereafter. (Section 144.752)

This provision is identical to a provision contained in SS#2/SCS/SB 648 (2020), and is substantially similar to a provision contained in SCS/SB 529 (2020), SB 659 (2020), SB 805 (2020), SB 872 (2020), SCS/HB 1700 (2020), HCS#2/HB 1957 (2020), HB 2172 (2020), HB 2238 (2020), and SCS/SBs 46 & 50 (2019).

SALES TAX ADMINISTRATION

This act authorizes the Department of Revenue to consult, contract, and work jointly with the Streamlined Sales and Use Tax Agreement's Governing Board to allow sellers to use the Governing Board's certified service providers and central registration system services, or to consult, contract, and work with certified service providers independently. The Department may determine the method and amount of compensation to be provided to certified service providers. (Section 144.608)

This provision is identical to a provision contained in SCS/HB 1700 (2020).

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)

These provisions are identical to provisions contained in SB 659 (2020), HB 2238 (2020), and SS/SCS/SBs 46 & 50 (2019), and are substantially similar to provisions contained in HB 1967 (2020).

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)

This provision is identical to a provision contained in SB 659 (2020), HB 1967 (2020), HB 2238 (2020), and SS/SCS/SBs 46 & 50 (2019).

Current law provides statutory sales tax collection thresholds to determine the frequency at which sellers shall file and remit sales taxes collected, with such periods being quarter-monthly, monthly, quarterly, and annually. Current law also allows the Department of Revenue to increase, but not decrease, such thresholds through rule. This act modifies the statutory thresholds for the monthly, quarterly, and annual filing periods.

For monthly filing, the threshold is changed from at least $250 in the first or second month of a calendar quarter to at least $500 per calendar month for the prior year.

For quarterly filing, the threshold is changed from at least $45 in a calendar quarter, but not subject to monthly filing to less than $500 per calendar month, but at least $200 in a calendar quarter.

For annual filing, the threshold is changed from less than $45 per calendar quarter to less than $200 per calendar quarter. (Section 144.080)

This provision is identical to SB 741 (2020) and SB 141 (2019).

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 certified service providers (CSP) 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 144.637 and 144.638)

This provision is substantially similar to a provision contained in SCS/SB 529 (2020), SB 659 (2020), SB 805 (2020), SB 872 (2020), SCS/HB 1700 (2020), HB 1895 (2020), HCS#2/HB 1957 (2020), and HB 2172 (2020).

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)

LOCAL USE TAXES

This act modifies ballot language required for the submission of a local use tax to voters by repealing ballot language specific to St. Louis County and its municipalities and the City of St. Louis, and making requiring the ballot language in all municipalities identical. (Section 144.757)

This provision is substantially similar to HB 1584 (2020) and to a provision contained in SS#2/SCS/SB 648 (2020), SB 659 (2020), HCS/SS#2/SB 704 (2020), SCS/SB 770 (2020), SB 805 (2020), SB 872 (2020), SS#2/SCS/HCS/HB 1854 (2020), SCS/HB 1700 (2020), HB 1895 (2020), HB 2172 (2020), HB 2238 (2020), SCS/SB 189 (2019), SS/SCS/SBs 46 & 50 (2019), SS/HCS/HB 255 (2019), SCS/HCS/HB 674 (2019), and HB 701 (2019), and is similar to a provision contained in HCS#2/HB 1957 (2020).

This act provides that the portion of the local use tax imposed by St. Louis County shall be distributed to the cities, towns, villages, and unincorporated areas of the county on the ratio of the population that each such city, town, village, and unincorporated area bears to the total population of the county. (Section 144.759)

This provision is identical to a provision contained in SCS/HB 1700 (2020).

EFFECTIVE DATE

The provisions of this act relating to sales tax administration, use taxes, and the income tax rate reduction shall become effective January 1, 2023.

Provisions establishing definitions relating to video service provider fees shall become effective August 28, 2023.

The remaining provisions shall become effective August 28, 2021.

JOSH NORBERG


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