HOUSE BILL NO. 518 103RD GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVE MATTHIESEN.
0963H.01I DANA RADEMAN MILLER, Chief Clerk
AN ACT To repeal sections 135.010, 135.025, and 135.030, RSMo, and to enact in lieu thereof three new sections relating to property tax credits.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Sections 135.010, 135.025, and 135.030, RSMo, are repealed and three 2 new sections enacted in lieu thereof, to be known as sections 135.010, 135.025, and 135.030, 3 to read as follows: 135.010. As used in sections 135.010 to 135.030 the following words and terms 2 mean: 3 (1) "Claimant", a person or persons claiming a credit under sections 135.010 to 4 135.030. If the persons are eligible to file a joint federal income tax return and reside at the 5 same address at any time during the taxable year, then the credit may only be allowed if 6 claimed on a combined Missouri income tax return or a combined claim return reporting their 7 combined incomes and property taxes. A claimant shall not be allowed a property tax credit 8 unless the claimant or spouse has attained the age of sixty-five on or before the last day of the 9 calendar year and the claimant or spouse was a resident of Missouri for the entire year, or the 10 claimant or spouse is a veteran of any branch of the Armed Forces of the United States or this 11 state who became one hundred percent disabled as a result of such service, or the claimant or 12 spouse is disabled as defined in subdivision (2) of this section, and such claimant or spouse 13 provides proof of such disability in such form and manner, and at such times, as the director 14 of revenue may require, or if the claimant has reached the age of sixty on or before the last 15 day of the calendar year and such claimant received surviving spouse Social Security benefits 16 during the calendar year and the claimant provides proof, as required by the director of
EXPLANATION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is intended to be omitted from the law. Matter in bold-face type in the above bill is proposed language. HB 518 2
17 revenue, that the claimant received surviving spouse Social Security benefits during the 18 calendar year for which the credit will be claimed. [A claimant shall not be allowed a 19 property tax credit if the claimant filed a valid claim for a credit under section 137.106 in the 20 year following the year for which the property tax credit is claimed.] The residency 21 requirement shall be deemed to have been fulfilled for the purpose of determining the 22 eligibility of a surviving spouse for a property tax credit if a person of the age of sixty-five 23 years or older who would have otherwise met the requirements for a property tax credit dies 24 before the last day of the calendar year. The residency requirement shall also be deemed to 25 have been fulfilled for the purpose of determining the eligibility of a claimant who would 26 have otherwise met the requirements for a property tax credit but who dies before the last day 27 of the calendar year; 28 (2) "Disabled", the inability to engage in any substantial gainful activity by reason of 29 any medically determinable physical or mental impairment which can be expected to result in 30 death or which has lasted or can be expected to last for a continuous period of not less than 31 twelve months. A claimant shall not be required to be gainfully employed prior to such 32 disability to qualify for a property tax credit; 33 (3) "Gross rent", amount paid by a claimant to a landlord for the rental, at arm's 34 length, of a homestead during the calendar year, exclusive of charges for health and personal 35 care services and food furnished as part of the rental agreement, whether or not expressly set 36 out in the rental agreement. If the director of revenue determines that the landlord and tenant 37 have not dealt at arm's length, and that the gross rent is excessive, then he shall determine the 38 gross rent based upon a reasonable amount of rent. Gross rent shall be deemed to be paid 39 only if actually paid prior to the date a return is filed. The director of revenue may prescribe 40 regulations requiring a return of information by a landlord receiving rent, certifying for a 41 calendar year the amount of gross rent received from a tenant claiming a property tax credit 42 and shall, by regulation, provide a method for certification by the claimant of the amount of 43 gross rent paid for any calendar year for which a claim is made. The regulations authorized 44 by this subdivision may require a landlord or a tenant or both to provide data relating to health 45 and personal care services and to food. Neither a landlord nor a tenant may be required to 46 provide data relating to utilities, furniture, home furnishings or appliances; 47 (4) "Homestead", the dwelling in Missouri owned or rented by the claimant and not to 48 exceed five acres of land surrounding it as is reasonably necessary for use of the dwelling as a 49 home. It may consist of part of a multidwelling or multipurpose building and part of the land 50 upon which it is built. "Owned" includes a vendee in possession under a land contract and 51 one or more tenants by the entireties, joint tenants, or tenants in common and includes a 52 claimant actually in possession if he was the immediate former owner of record, if a lineal HB 518 3
53 descendant is presently the owner of record, and if the claimant actually pays all taxes upon 54 the property. It may include a mobile home; 55 (5) "Income", Missouri adjusted gross income as defined in section 143.121 less two 56 thousand dollars for all calendar years ending on or before December 31, 2025, or in the 57 case of a homestead owned and occupied, for the entire year, by the claimant, less four 58 thousand dollars as an exemption for the claimant's spouse residing at the same address[,] for 59 all calendar years ending on or before December 31, 2025, and for all calendar years 60 beginning on or after January 1, 2026, less two thousand eight hundred dollars, or in the 61 case of a homestead owned and occupied, for the entire year, by the claimant, less five 62 thousand eight hundred dollars as an exemption for the claimant's spouse residing at 63 the same address; and increased, where necessary, to reflect the following: 64 (a) Social Security, railroad retirement, and veterans payments and benefits unless the 65 claimant is a one hundred percent service-connected, disabled veteran or a spouse of a one 66 hundred percent service-connected, disabled veteran. The one hundred percent service- 67 connected disabled veteran shall not be required to list veterans payments and benefits; 68 (b) The total amount of all other public and private pensions and annuities; 69 (c) Public relief, public assistance, and unemployment benefits received in cash, other 70 than benefits received under this chapter; 71 (d) No deduction being allowed for losses not incurred in a trade or business; 72 (e) Interest on the obligations of the United States, any state, or any of their 73 subdivisions and instrumentalities; 74 (6) "Property taxes accrued", property taxes paid, exclusive of special assessments, 75 penalties, interest, and charges for service levied on a claimant's homestead in any calendar 76 year. Property taxes shall qualify for the credit only if actually paid prior to the date a return 77 is filed. The director of revenue shall require a tax receipt or other proof of property tax 78 payment. If a homestead is owned only partially by claimant, then "property taxes accrued" is 79 that part of property taxes levied on the homestead which was actually paid by the claimant. 80 For purposes of this subdivision, property taxes are "levied" when the tax roll is delivered to 81 the director of revenue for collection. If a claimant owns a homestead part of the preceding 82 calendar year and rents it or a different homestead for part of the same year, "property taxes 83 accrued" means only taxes levied on the homestead both owned and occupied by the 84 claimant, multiplied by the percentage of twelve months that such property was owned and 85 occupied as the homestead of the claimant during the year. When a claimant owns and 86 occupies two or more different homesteads in the same calendar year, property taxes accrued 87 shall be the sum of taxes allocable to those several properties occupied by the claimant as a 88 homestead for the year. If a homestead is an integral part of a larger unit such as a farm, or 89 multipurpose or multidwelling building, property taxes accrued shall be that percentage of the HB 518 4
90 total property taxes accrued as the value of the homestead is of the total value. For purposes 91 of this subdivision "unit" refers to the parcel of property covered by a single tax statement of 92 which the homestead is a part; 93 (7) "Rent constituting property taxes accrued", twenty percent of the gross rent paid 94 by a claimant and spouse in the calendar year. 135.025. The property taxes accrued and rent constituting property taxes accrued on 2 each return shall be totaled. This total, up to seven hundred fifty dollars in rent constituting 3 property taxes actually paid or eleven hundred dollars in actual property tax paid, shall be 4 used in determining the property tax credit for all calendar years ending on or before 5 December 31, 2025. For all calendar years beginning on or after January 1, 2026, this 6 total, up to one thousand fifty-five dollars in rent constituting property taxes actually 7 paid or one thousand five hundred fifty dollars in actual property tax paid, shall be used 8 in determining the property tax credit. The director of revenue shall prescribe regulations 9 providing for allocations where part of a claimant's homestead is rented to another or used for 10 nondwelling purposes or where a homestead is owned or rented or used as a dwelling for part 11 of a year. 135.030. 1. As used in this section: 2 (1) The term "maximum upper limit" shall, for each calendar year after December 31, 3 1997, but before calendar year 2008, be the sum of twenty-five thousand dollars. For all 4 calendar years beginning on or after January 1, 2008, but ending on or before December 31, 5 2025, the maximum upper limit shall be the sum of twenty-seven thousand five hundred 6 dollars. In the case of a homestead owned and occupied for the entire year by the claimant, 7 for all calendar years ending on or before December 31, 2025, the maximum upper limit 8 shall be the sum of thirty thousand dollars. For all calendar years beginning on or after 9 January 1, 2026, the maximum upper limit shall be the sum of thirty eight thousand two 10 hundred dollars and in the case of a homestead owned and occupied for the entire year 11 by the claimant, the maximum upper limit shall be the sum of forty-two thousand two 12 hundred dollars. Beginning January 1, 2027, the maximum upper limits shall be 13 increased annually for inflation based on the Consumer Price Index for All Urban 14 Consumers for the Midwest Region, as defined and officially recorded by the United 15 States Department of Labor or its successor; 16 (2) The term "minimum base" shall, for each calendar year after December 31, 1997, 17 but before calendar year 2008, be the sum of thirteen thousand dollars. For all calendar years 18 beginning on or after January 1, 2008, the minimum base shall be the sum of fourteen 19 thousand three hundred dollars. 20 2. (1) For all calendar years ending on or before December 31, 2025, if the 21 income on a return is equal to or less than the maximum upper limit for the calendar year for HB 518 5
22 which the return is filed, the property tax credit shall be determined from a table of credits 23 based upon the amount by which the total property tax described in section 135.025 exceeds 24 the percent of income in the following list: 25 If the income on the return is: The percent is: 26 Not over the minimum base 0 percent with credit not to exceed 27 $1,100 in actual property tax or 28 rent equivalent paid up to $750 29 Over the minimum base but not 1/16 percent accumulative per 30 over the maximum upper limit $300 from 0 percent to 4 percent. 31 (2) The director of revenue shall prescribe a table based upon [the preceding 32 sentences] subdivision (1) of this subsection. The property tax shall be in increments of 33 twenty-five dollars and the income in increments of three hundred dollars. The credit shall be 34 the amount rounded to the nearest whole dollar computed on the basis of the property tax and 35 income at the midpoints of each increment. As used in this subsection, the term 36 "accumulative" means an increase by continuous or repeated application of the percent to the 37 income increment at each three hundred dollar level. 38 3. (1) For all calendar years beginning on or after January 1, 2026, if the income 39 on a return is equal to or less than the maximum upper limit for the calendar year for 40 which the return is filed, the property tax credit shall be determined from a table of 41 credits based upon the amount by which the total property tax described in section 42 135.025 exceeds the percent of income in the following list: 43 If the income on the return is: The percent is:
44 Not over the minimum base 0 percent with credit not to 45 exceed $1,550 in actual 46 property tax or rent equivalent 47 paid up to $1,055.
48 Over the minimum base but 1/16 percent accumulative per 49 not over the maximum upper $495 from 0 percent to 2 50 limit percent. 51 (2) The director of revenue shall prescribe a table based upon subdivision (1) of 52 this subsection. The property tax shall be in increments of twenty-five dollars and the 53 income in increments of four hundred ninety-five dollars. The credit shall be the 54 amount rounded to the nearest whole dollar computed on the basis of the property tax 55 and income at the midpoints of each increment. As used in this subsection, the term HB 518 6
56 "accumulative" means an increase by continuous or repeated application of the percent 57 to the income increment at each four-hundred-ninety-five-dollar level. 58 4. Notwithstanding subsection 4 of section 32.057, the department of revenue or any 59 duly authorized employee or agent shall determine whether any taxpayer filing a report or 60 return with the department of revenue who has not applied for the credit allowed pursuant to 61 section 135.020 may qualify for the credit, and shall notify any qualified claimant of the 62 claimant's potential eligibility, where the department determines such potential eligibility 63 exists. ✔
Statutes affected: