SPONSOR: Eggleston
COMMITTEE ACTION: Voted "Do Pass with HCS" by the Standing Committee on Ways and Means by a vote of 8 to 3. Voted "Do Pass" by the Standing Committee on Rules- Administrative Oversight by a vote of 10 to 4.
The following is a summary of the House Committee Substitute for HB 555.
This bill modifies provisions relating to taxation.
TAX MAP (Section 32.310, RSMo)
Currently, the Department of Revenue maintains a mapping feature on its website that displays sales tax information of political subdivisions of this state that have taxing authority.
This bill requires use tax information to be added to the mapping feature.
By July 1, 2022, this bill requires the mapping feature to show the total of rates of sales and use taxes of overlapping taxing jurisdictions and requires the mapping feature to include property tax levy information, including the current rate, of political subdivisions in this state that have property taxing authority. The State Auditor will provide the Department of Revenue all property tax levy information for the Department to comply with the property tax requirement by January 1, 2022.
CERTAIN TAXING DISTRICTS (Sections 67.1545, 238.207, 238.235, and 238.237)
Currently, Community Improvement Districts (CIDs) and Transportation Development Districts (TDDs) are authorized to impose a sales tax on purchases made within such districts if approved by a majority of voters living within the district. This bill requires such sales taxes to be approved by a majority of the voters of the district if 30,000 or more qualified voters reside in such district, or a majority of the voters of the municipalities of the district if such district is located wholly within one or more municipalities and less than 30,000 qualified voters reside in such district, or a majority of the voters of the county or counties of the district if such district is not wholly located within one or more municipalities and less than 30,000 qualified voters reside in such district. Additionally, current law authorizes TDDs to charge and collect tolls or fees for the use of a project if approved by a majority of voters within the district. This bill requires such tolls or fees to be approved by a majority of the voters of the district if 30,000 or more qualified voters reside in such district, or a majority of the voters of the municipalities of the district if such district is located wholly within one or more municipalities and less than 30,000 qualified voters reside in such district, or a majority of the voters of the county or counties of the district if such district is not wholly located within one or more municipalities and less than 30,000 qualified voters reside in such district.
Beginning January 1, 2022, any sales and use tax authorized by a CID or TDD will expire 20 years from January 1, 2022, or 20 years from the effective date of such sales and use tax authorized by a CID or TDD, whichever is later, unless reauthorized by the qualified voters under this section.
VIDEO SERVICE PROVIDERS (Sections 67.2677 and 67.2689)
This bill modifies the definition of "gross revenues" as it applies to video service provider fees and modifies the video service provider fee that a franchise entity may collect from each customer.
Currently, a franchise entity may collect a fee of 5% of gross revenues. Beginning January 1, 2023, for any county or municipality that adopts a local use tax under Section 144.757 of this bill, the fee would be 4% of gross revenues. The fee would reduce by 1% of gross revenues each year until the fee is eliminated on January 1, 2027. The video service provider must also identify and collect the fee and other specified fees as separate line items on a customer's bill.
FINANCIAL REPORTS OF POLITICAL SUBDIVISIONS (Section 105.145)
This bill changes the laws regarding the consequences to a political subdivision for failure to file an annual financial statement with the State Auditor as required.
The bill provides that the mayor of a municipality must also receive notice by certified mail from the Department of Revenue that the statement has not been received by the State Auditor.
Any political subdivision that has gross revenues of less than $5,000 or that has not levied a sales or use tax is not subject to the fine. If the failure to submit the annual financial statement was a result of fraud or other illegal conduct by any employee, the failure will not result in a fine.
The first time a political subdivision that has outstanding fines due files its financial statement after January 1, 2022, the Director will make a one-time downward adjustment of 90% of the total amount due.
In addition, the Director of the Department of Revenue has the authority to make a one-time downward adjustment to any fine he or she deems uncollectible.
The Director will initiate the process to disincorporate a political subdivision if a political subdivision has an outstanding balance for fines or penalties and fails to file an annual financial statement as provided in the bill. A resident of a political subdivision may file an affidavit with the Director with information regarding the political subdivision's failure to report.
The question of whether the political subdivision should be disincorporated will be submitted to the voters of that political subdivision at the next general election. The election authority for conducting the election will give notice of the election for eight consecutive weeks prior to the election by publication in a newspaper as specified in the bill. Upon an affirmative vote of a majority of the qualified voters, the Director will file an action to disincorporate the political subdivision in the circuit court.
In an action to disincorporate, the circuit court will order: the appointment of an administrative authority for the political subdivision as specified; all financial and other institutions holding funds of the political subdivision to honor the directives of the administrative authority; the Director to distribute tax revenues and funds of the political subdivision to the administrative authority; and the effective date of the disincorporation of the political subdivision.
The Attorney General will also have the authority to file an action in court against any political subdivision that fails to comply with these provisions in order to compel the political subdivision into compliance.
TAXATION OF AIRCRAFT (Section 137.115)
This bill increases the number of hours of operation per year a noncommercial aircraft at least 25 years old can fly from less than 50 hours to less than 200 hours in order to be assessed and valued at 5% of the aircraft's true value for property tax purposes.
INCOME TAX (Sections 143.011, 143.031, 143.121, 143.131, and 143.171)
Currently, the top rate of income tax may be reduced over a period of years if certain triggers are met.
This bill replaces the current rates of tax on income based upon different levels of income of Missouri taxable income with a tax rate of 5.3% on all Missouri taxable income and has the current income tax cuts applied to this rate.
Currently, the Missouri combined taxable income on a combined return must include all of the income and deductions of the husband and wife, and Missouri taxable income of each spouse is an amount that is the same proportion of their Missouri combined taxable income as the Missouri adjusted gross income of that spouse bears to their Missouri combined adjusted gross income.
Beginning, January 1, 2022, the Missouri combined taxable income on a combined return must include all of the income and deductions of the husband and wife.
Currently, a taxpayer is allowed to deduct from his or her Missouri adjusted gross income a portion of his or her federal income taxes paid. This bill provides that federal income tax credits received under Public Law 116-260 (Consolidated Appropriations Act, 2021) or any amount of federal income tax refund attributable to a tax credit reducing a taxpayer's federal tax liability under any other federal law that provides direct economic impact payments to taxpayers related to the COVID-19 pandemic will not be considered when determining the amount of federal income tax liability allowable as a deduction.
Currently, taxpayers who itemize deductions are required to include any federal income tax refund amounts in his or her Missouri adjusted gross income if such taxpayer previously claimed a deduction for federal income tax liability on his or her Missouri income tax return. This bill provides that any amount of a federal income tax refund attributable to a tax credit received under Public Law 116-260 (Consolidated Appropriations Act, 2021) or any amount of federal income tax refund attributable to a tax credit reducing a taxpayer's federal tax liability under any other federal law that provides direct economic impact payments to taxpayers related to the COVID-19 pandemic will not be included in the taxpayer's Missouri adjusted gross income.
This bill increases the Missouri standard deduction to the allowable federal standard deduction plus $4000 if filing single or married and filing separately, or plus $8000 if married and filing jointly.
USE TAX (Section 144.605)
Beginning January 1, 2022, this bill provides that a vendor engages in business activities in this state if a vendor during a 12 month period meets the following criteria:
(1) Has cumulative gross receipts of at least $100,000 from the sale of tangible personal property to purchasers for the purpose of storage, use, or consumption in this state, as determined by the bill; and
(2) Does not have a physical presence within the state and the associated sales occurred with use of the Internet.
Any department that has the Constitutional authority to collect sales and use tax under Article IV of the Constitution of Missouri may remit any new revenue collected under the provisions of the bill to the General Revenue Fund.
This bill specifies that any vendor that does not have a physical presence within the state and the associated sales occurred with use of the Internet will not be subject to use taxes of a political subdivision in this state unless the use tax is approved or reapproved by the voters of the political subdivision.
Additionally, this bill provides that political subdivisions that wish to enact a new local use tax, but do not wish to subject vendors that do not have a physical presence within the state and the associated sales occurred with use of the Internet to such local use tax, may enact such local use tax according to the applicable provisions local use tax laws, or any other applicable local use tax authorization provisions, and may exclude such vendors from such new tax.
TAXING JURISDICTION DATABASE (Section 144.637)
This bill requires the Director of the Department of Revenue to provide and maintain a downloadable electronic database at no cost to the user for taxing jurisdiction boundary changes and tax rates. Such databases may be directly provided by the Director, or may be provided by a third party as designated by the Director.
Vendors will not be liable for reliance upon incorrect data provided by the Director on tax rates, boundaries, or taxing jurisdiction assignments.
Statutes affected: