SB 0075 Exempts several items from sales and use tax; allows tax credit for contributions to a scholarship charity
LR Number:S0577.03P Fiscal Note:0577-03
Committee:Ways and Means
Last Action:05/14/99 - S Inf Calendar S Bills for Third Reading Journal page:
Title:SS SCS SBs 75, 381 & 204
Effective Date:August 28, 1999
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Current Bill Summary

SS/SCS/SBs 75, 381 & 204 - This act exempts from state and local sales and use tax the following items: purchases of equipment by a federally licensed commercial or public broadcast station, if the purchase is made as a result of a federal mandate and resulting technological change (same as TAT CCS/SCS/HCS/HB 139); sales of tangible personal property for use or consumption directly or predominantly in research or experimentation activities (same as SB 380 and TAT CCS/SS/SCS/HS/HB 516); sales of equipment, machinery and related components used by Missouri- owned businesses which harvest and produce timber and wood products, with transportation equipment included if the equipment does not provide more than 10% of the gross revenue of the business; sales of machines and parts used in commercial, coin- operated amusement and vending businesses if sales tax is paid on the gross receipts from the machines (same as TAT CCS/SS/SCS/HS/HB 516); admission fees for hunting or taking certain game birds and hoofed animals on licensed shooting areas and sales of feed and equipment used in producing those birds and animals by holders of an approved wildlife breeders permit; the purchase or storage within the state by an air common carrier of catered food and beverages for in-flight consumption; and sales of coke, coke breeze, and reagents which become ingredient or component parts in steel or lead products. The act removes the existing tax exemption for sales of over-the-counter or nonprescription drugs to individuals with disabilities.

The act excludes from the definition of food, for purposes of the reduced sales tax rate, food or drink where the gross receipts of selling that food constitutes more than eighty percent of the total gross receipts of that establishment. Food sold in establishments in which the gross receipts from food is under eighty percent, and food sold in vending machines, would be subject to the lower sales tax rate. This provision is the same as TAT SCS/HB 548.

The definition of "use" for purposes of the use tax is clarified to exclude the temporary storage of property in the state for subsequent use outside the state. This provision is contained in CCS/SCS/HCS/HB 139.

The act authorizes an optional county tax on the sale of non-agricultural products containing phosphorus at the retail level. Any county, by majority vote of the county, may levy up to a one percent sales tax at retail on all products containing at least 0.1% elemental phosphorus by weight, except that fertilizers used for agricultural production are exempted. A county shall use the funds for wastewater treatment or water pollution abatement. The funds may be used as matching funds for obtaining any grants or loans administered by the Clean Water Commission pursuant to chapter 644, RSMo. Revenues collected by the Director of Revenue on behalf of a county shall be placed in a separate fund and returned each month to the county where collected. The provision is the same as SB 494.

All tax laws of the state involving the tax liability of a taxpayer are required to be strictly construed against the taxing authority and in favor of the taxpayer. The Director of Revenue bears the burden of proof on factual issues if the taxpayer has produced evidence of a reasonable dispute over an issue and has complied with reasonable requests for documents and other information. An invalid tax exemption certificate accepted in good faith from the purchaser will relieve the taxpayer of liability for the tax. This provision is similar to CCS/SS/SCS/HS/HB 516.

The act prohibits the State of Missouri or any political subdivision from contracting for or arranging a tax audit by private parties if the compensation is contingent on the amount of tax, interest or penalty assessed or collected from the taxpayer.

The act authorizes a tax credit in an amount equal to 50% of the amount which a taxpayer contributes to a scholarship charity, defined as a section 501(c)(3) charitable organization that allocates at least 90% of its annual revenue for educational scholarships to children to allow them to attend a qualified school. The credit may be taken against the individual or corporate income tax, the corporation franchise tax, the insurance premium tax, the tax on other financial institutions, or the tax on bridge, express and public utility companies. The tax credit is not refundable and cannot exceed $50,000 per taxable year, but it may be carried forward for the next four taxable years. The Director of the Department of Economic Development is required to determine on an annual basis which charities qualify as scholarship charities and to establish procedures for apportioning the credits to qualified scholarship charities. The cumulative amount of tax credits is limited to $5 million per fiscal year.

The act creates a Water Safety Fund. Five hundred thousand dollars shall be placed in the Water Safety Fund for each of the next ten fiscal years, with spending subject to appropriation and an effective date of October 1, 1999.