HB 2400 Modifies provisions relating to business entities

     Handler: Hoskins

Current Bill Summary

- Prepared by Senate Research -


SS/HB 2400 - This act modifies provisions relating to business entities.

PERSONAL PRIVACY PROTECTION ACT

(Section 105.1500)

This act establishes the "Personal Privacy Protection Act" prohibiting public agencies, as defined in the act, from disclosing or requiring the disclosure of personal information, as defined in the act. Specifically, public agencies are prohibited from:

· Requiring any individual to provide the public agency with personal information or otherwise compel the release of such personal information;

· Requiring any entity exempt from federal income taxation under Section 501(c) of the Internal Revenue Code to provide the public agency with personal information or otherwise compel the release of personal information;

· Releasing, publicizing, or otherwise publicly disclosing personal information in possession of a public agency; or

· Requesting or requiring a current or prospective contractor or grantee with the public agency to provide the public agency with a list of entities exempt from federal income tax under Section 501(c) of the Internal Revenue Code to which it has provided financial or nonfinancial support.

The act contains various exceptions to these prohibitions.

Any person or entity may bring a civil action for appropriate injunctive relief, damages, or both. Damages may be not less than $2,500 to compensate for injury or loss caused by each violation of this act and, for an intentional violation, a sum of money not to exceed three times the sum of damages assessed. A court may additionally award all or a portion of the costs of litigation, including reasonable attorney fees and witness fees, to the complainant in the action if the court determines that the award is appropriate. Furthermore, a person who knowingly violates this act is guilty of a Class B misdemeanor.

This provision is identical to a provision in the perfected SS/SCS/SB 741 (2022) and substantially similar to the perfected HCS/HB 2120 (2022), HCS/HB 1030 (2021), SB 464 (2021), and a provision in HCS/SS/SB 333 (2021).

LLC CAMPAIGN CONTRIBUTIONS

(Section 130.029)

The amendment permits any limited liability company that has not elected to be classified as a corporation under federal law to make campaign contributions to any committee, provided such limited liability company has been in existence for at least one year prior to making such contribution and such entity electronically files with the Missouri Ethics Commission indicating that such LLC is a legitimate business with a legitimate business interest and is not created for the sole purpose of making campaign contributions.

This provision is substantially similar to a provision in SS/SCS/SB 931 (2022).

NEW BUSINESS FACILITIES TAX CREDIT

(Section 135.155)

Current law authorizes a tax credit for a 10-year period for businesses that establish a headquarters in the state, with an additional possible 10-year period if certain conditions are met. This act allows for a further additional 6-year period conditional on such conditions being met. (Section 135.110)

Current law also provides that such tax credit shall only be available for headquarters that commence operations on or before December 31, 2024. This act extends such date to December 31, 2031.

This provision is substantially similar to SCS/SB 1141 (2022).

TAX CREDIT ACCOUNTABILITY ACT

(Section 135.800-135.815)

This act modifies the definition of "domestic and social tax credits" by removing the health care access fund tax credit, which has expired, and by adding the previously authorized health, hunger, and hygiene tax credit.

This act also modifies the definition of "recipient" to provide that such term does not include the transferee of a tax credit. (Section 135.800)

This act requires an applicant for a tax credit, as a part of the application process, to sign a statement affirming that the applicant is aware of the reporting requirements and penalty provisions of the Tax Credit Accountability Act. (Section 135.802)

Current law requires the recipients of tax credits to file annual reports that includes either the estimated or actual project costs. This act requires such reports to include both the estimated and actual project costs.

Additionally, current law requires the administering agency of a tax credit to make available the names of each tax credit recipient. This act allows such information to be made available either on the Department of Economic Development's website or through the Missouri Accountability Portal.

This act modifies a provision providing that a person or entity shall not be required to submit an annual report until at least one year after the credit issuance date by making such time period one month.

Current law provides for penalties for a failure to submit required annual reports, with a penalty of 2% of the value of the tax credits for each month of delinquency of more than six months but less than one year, and a penalty of 10% of the value of the credits for each month of delinquency of more than one year. This act modifies such penalties. Failure to file the first annual report for more than three months shall result in a penalty of 1% of the value of the credits, not to exceed 10%. Failure to file the second or third annual report for more than three months shall result in a penalty of 1.5% of the value of the credits, not to exceed 20% per report.

Current law provides for a penalty equal to 100% of the value of the credits for fraud in the tax credit application process. This act increases such penalty to 200% for fraud in the application or reporting process. This act also provides that the Administrative Hearing Commission shall determine whether fraud has occurred. The Department of Revenue, the Department of Economic Development, or the administering agency may file a fraud complaint to the Administrative Hearing Commission, as described in the act.

Current law requires an administering agency to send a notice of delinquency ninety days after the annual report is due. This act changes such requirement to thirty days. This act also allows the Department of Revenue to enter into agreements to compromise or abate some or all of any penalties administered under the act. (Section 135.810)

Current law requires tax credit applicants to forfeit and repay tax credits if such applicant purposely and directly employs unauthorized aliens. This act changes such standard to an applicant knowingly employing unauthorized aliens. (Section 135.815)

These provisions are identical to provisions in SCS/SB 868 (2022).

"SALE AT RETAIL" FOR THE PURPOSES OF SALES TAXES ON CERTAIN PURCHASES OF UTILITIES

(Sections 143.010 to 143.011)

This act provides that, for the purposes of levying sales tax, the definition of "sale at retail" shall not include the purchase by persons operating hotels, motels, or other transient accommodation establishments of electricity, electrical current, water, and gas, whether natural or artificial, which are used to heat, cool, or provide water or power to the guests' accommodations of such establishments, including sleeping rooms, meeting and banquet rooms, and any other customer space rented by guests, and which are included in the charge made for such accommodations. Any person required to remit sales tax on such purchases prior to August 28, 2022, shall be entitled to a refund on such taxes remitted.

This provision is identical to SB 945 (2022).

S CORP TAX CREDIT

(Section 143.081)

Current law authorizes a tax credit for the amount of income tax paid to another state for income that is also taxed in this state. This amendment allows such tax credit to be claimed by resident shareholders of an S corporation for the amount of tax imposed by this state on income earned in another state but not taxed by such state.

This provision is identical to SB 410 (2021) and to a provision in SS/SCS/SB 931 (2022).

HEALTH INSURANCE DEDUCTION TAX CREDIT

(Section 143.119)

Current law authorizes a refundable tax credit for self-employed taxpayers who are ineligible for the federal health insurance deduction. This act modifies such tax credit by making it nonrefundable, nontransferable, and not eligible to be carried forward or backward to any other tax year. This act also requires a taxpayer to have a Missouri income tax liability of less than $3,000. A taxpayer shall not be able to claim such tax credit and the state health insurance deduction in current law for the same tax year.

This provision shall sunset on December 31, 2028, unless reauthorized by the General Assembly.

This provision is identical to a provision in SCS/SB 868 (2022).

SALT PARITY ACT

(Section 143.436)

This amendment establishes the "SALT Parity Act".

Current law provides that, in lieu of a corporate income tax on a pass-through entity, shareholders of such pass-through entity shall pay income tax on the shareholder's pro rata share of the entity's income attributable to Missouri. For tax years ending on or after December 31, 2022, this amendment allows the pass-through entity to elect to pay the tax, as described in the amendment. The tax shall be equal to the sum of each member's income and loss items, as described in federal law, reduced by a deduction allowed for qualified business income, as described in federal law, and modified by current provisions of state law relating to the taxation of pass-through entities, with such sum multiplied by the highest rate of tax in effect for the state personal income tax.

A nonresident who is a member, as defined in the amendment, shall not be required to file a tax return for a tax year if, for such tax year, the only income derived from this state for such member is from one or more affected business entities, as defined in the amendment, that has elected to pay the tax imposed under this amendment.

Each partnership and S corporation shall report to each of its members, for each tax year, the member's pro rata share of the tax imposed by this amendment.

Each taxpayer, including part-year residents, that is subject to the state personal income tax shall be allowed a tax credit if such taxpayer is a member of an affected business entity that elects to pay the tax imposed by this amendment. The tax credit shall be equal to the taxpayer's pro rata share of the tax paid under this amendment. Such tax credit shall be nonrefundable, but may be carried forward to subsequent tax years, except that a tax credit authorized for taxes paid to other states shall not be carried forward.

Each corporation that is subject to the state corporate income tax shall be allowed a tax credit if such corporation is a member of an affected business entity that elects to pay the tax imposed by this amendment. The tax credit shall be equal to the corporation's pro rata share of the tax paid under this amendment. Such tax credit shall be nonrefundable, but may be carried forward to subsequent tax years.

Partnerships and S corporations may elect to pay the tax imposed under this amendment by submitting a form to be provided by the Department of Revenue. A separate election shall be made for each tax year. Such election shall be signed either by each member of the electing entity, or by any officer, manager, or member of the electing entity who is authorized to make such election and who attests to having such authorization under penalty of perjury.

An affected business entity shall designate an affected business entity representative for the tax year to act on behalf of the affected business entity in any action required or permitted to be taken by an affected business entity pursuant to this amendment, a proceeding to protest taxes, an appeal to the Administrative Hearing Commission, or review by the judiciary with respect to such action, and the affected business entity's members shall be bound by those actions.

This provision is identical to a provision in SS/SCS/SB 931 (2022) and is substantially similar to SB 1154 (2022).

MISSOURI RX PLAN

(Section 208.798)

This act changes the expiration date of the Missouri Rx Plan from August 28, 2022, to August 28, 2029.

This provision is identical to SB 1179 (2022).

PROFESSIONAL EMPLOYER ORGANIZATIONS

(Section 285.730)

This act provides that both a client and a registered professional employer organization (PEO) shall each be deemed an employer for purposes of sponsoring retirement and welfare benefits plans for its covered employees. A fully insured welfare benefit plan sponsored by a registered PEO for the benefit of its covered employees shall be treated for the purposes of state law as a single employer welfare benefit plan. For purposes of sponsoring welfare benefit plans for its eligible covered employees, a registered PEO shall be considered the employer of all of its eligible covered employees, and all eligible covered employees of one or more clients participating in a health benefit plan sponsored by a registered PEO shall be considered employees of such registered PEO.

This provision is identical to SB 904 (2022).

EXCURSION GAMBLING BOATS

(Sections 313.800 to 313.805)

Current law defines "nonfloating facility" for the purposes of licensing excursion gambling boats as a structure within one thousand feet of the Missouri or Mississippi River. This act requires such structure to be within one thousand feet from the closest edge of the main channel of the Missouri or Mississippi River. This act also allows the water beneath or inside of such facility to be in tanks in addition to rigid or semirigid storage containers or structures. (Section 313.800)

This act also makes technical corrections to provisions relating to the transition from a floating facility to a nonfloating facility. (Section 313.805)

These provisions are identical to SB 987 (2022).

CHARITABLE ORGANIZATIONS

(Section 407.475)

The act prohibits the state from imposing any additional annual filing or reporting requirements on a charitable organization that are more stringent, restrictive, or expansive than the report already required to be submitted to the Attorney General's office unless such filing or report is specifically required by federal law. This provision shall not apply to labor organizations, state grants or contracts, or investigations by the Attorney General of charitable organizations as set forth in state statute.

The restriction on additional annual filing or reporting requirements on a charitable organization shall not apply when such organization is providing any report or disclosure required by state law to be filed with the Secretary of State.

These provisions are identical to a provision in the perfected SS#2/SCS/SB 968 (2022) and similar to HB 1490 (2022), provisions in CCS/HCS/SS/SB 333 (2021), and to HB 245 (2021).

SHOW-ME HEROES PROGRAM

(Section 620.515)

This act provides that the Department of Higher Education and Workforce Development may award grants from the Show-Me Heroes Program or a program administering the Show-Me Heroes Program to one or more nonprofit organizations that facilitate the participation of veterans and active duty United States military personnel transitioning to civilian employment in apprenticeship training programs, as described in the act. The grant shall be used only to recruit or assist veterans or active duty United States military personnel transitioning into civilian employment to participate in an apprenticeship training program in this state.

This provision is identical to a provision in SB 1013 (2022).

MISSOURI ONE-START PROGRAM

(Sections 620.800 to 620.809)

This act modifies the Missouri One Start Program by adding, modifying, and repealing certain definitions.

The definition of "committee", "existing Missouri business", and "training program" are removed. Definitions for "application", "recruitment services", and "relocation costs" are added. The definition of "project facility" is modified by removing county average wage requirements in cases where multiple facilities make up the project facility. The definition of "training project costs" is modified to include relocation costs and costs of training project services not otherwise included in the definition. (Section 620.800)

This act also repeals the Missouri One Start Job Training Joint Legislative Oversight Committee, which was tasked with providing a report on all assistance to qualified companies under the Missouri One Start Program.

The act also authorizes the Department of Economic Development to contract with other entities to provide recruitment services to qualified companies. (Section 620.803)

This act provides that recruitment services for qualified companies shall be administered by the Department, while financial assistance for training projects shall be administered by a local education agency certified by the Department for that purpose. This act also repeals a provision prohibiting a qualified company from receiving more than fifty percent of its training program costs from the Missouri One Start Job Development Fund. (Section 620.806)

Under current law, new job credits are deposited in the Missouri One Start Community College New Jobs Training Fund, and retained job credits are deposited in the Missouri One Start Community College Job Retention Training Fund. Beginning July 1, 2023, all unobligated moneys in such funds shall be transferred to the Missouri One Start Community College Training Fund, which is created by the act, and to which all new jobs credits and retained jobs credits shall be deposited. (Section 620.809)

These provisions are identical to SB 1072 (2022).

CITIZEN'S LAND DEVELOPMENT COOPERATIVE ACT

(Section 620.850)

This act establishes the "Citizen's Land Development Cooperative Act", which creates the Citizen's Land Development Cooperative Commission within the Department of Revenue. The Commission shall consist of eleven members to be appointed by the Governor, with the advice and consent of the Senate.

The Commission shall gather information and make annual reports to the Governor and the General Assembly regarding the establishment and operation of citizen's land development cooperatives. The act defines a citizen's land development cooperative as a for-profit, citizen-owned, professionally managed real estate planning and development corporation or land cooperative that may receive title to land, natural resources, physical infrastructure, or facilities donated by a not-for-profit organization or government entity; borrow money on behalf of its shareholders for the purposes of carrying out the mission of the corporation, and enable each citizen whose principal residence is situated in an area for which future development will be controlled by a citizen's land development cooperative to acquire, free as a right of citizenship, an equal, lifetime, non-transferable, private property ownership stake in the development of the area, as described in the act.

Annual reports submitted by the Commission shall include recommendations on policies relating to the creation and operation of citizen's land development cooperatives, related tax reforms, studies, assistance to local communities, applying for and accepting private funds, and annual financial accounting reports, as described in the act.

Subject to appropriation, the Department of Economic Development shall develop and maintain a program to make grants to communities seeking to establish citizen's land development cooperatives and encourage them to become self-sustaining from land rentals and other fees within the first five years of their formation. The Commission shall seek funding from local, state, federal, and private sources to make grants and loans and otherwise enhance the development of citizen's land development cooperatives. Funds received pursuant to this act shall be deposited into the Citizen's Land Development Cooperative Fund, which is created by the act.

This provision is identical to SCS/SB 772 (2022) and substantially similar to SB 460 (2021).

QUALIFIED RESEARCH EXPENSES TAX CREDIT

(Section 620.1039)

A tax credit for a portion of qualified research expenses, as defined in federal law, expired on December 31, 2004. This amendment reauthorizes such tax credit, which shall be equal to 15% of qualified research expenses, or 20% of qualified research expenses if done in conjunction with a public or private college or university located in this state, as described in the amendment. Tax credits shall not be issued for any qualified research expenses that exceed 200% of the taxpayer's average qualified research expenses incurred during the three immediately preceding tax years. Tax credits issued under the amendment shall not be refundable, but may be carried forward for the twelve succeeding tax years, and may be transferred, sold, or assigned. A taxpayer shall not receive tax credits in excess of $300,000 in a calendar year.

This amendment also authorizes a sales tax exemption for the purchase of qualified research and development equipment and property, as defined in the amendment.

Tax credits issued under the amendment shall not exceed ten million dollars in any year, provided that five million dollars of such tax credits shall be reserved for minority business enterprises, women's business enterprises, and small businesses, as defined in the amendment.

The provisions of this amendment shall sunset on December 31, 2028, unless reauthorized by the General Assembly.

This provision is identical to SB 688 (2022) and is substantially similar to SCS/SB 545 (2021) and HCS/HB 690 (2021), and to a provision contained in SS/SCS/SB 354 (2021).

MEET IN MISSOURI PROGRAM

(Section 620.1620)

The act extends the sunset on the Meet in Missouri Program from six years after August 28, 2016, to six years after August 28, 2022.

MISSOURI WORKS PROGRAM

(Section 620.2020)

This act provides that, during a statewide state of emergency existing for more than 16 months, a qualified company or industrial development authority shall be entitled to a one-time suspension of program deadlines equal to the number of months such statewide state of emergency existed with any partial month round rounded to the next whole, subject to stipulations as provided in the act.

SCOTT SVAGERA


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