The recently concluded 94th legislative session produced 12 major tax bills signed by Missouri Governor Matt Blunt. The bills include: Senate Bills 22, 30, 81, 86, 162, 233, 406, 497, and 577; and House Bills 444, 453, and 741.
Governor Blunt vetoed House Bill 327, an omnibus economic development package that contained a number of significant tax provisions, including expansion of the Enhanced Enterprise Zone, Small Business Investment Tax Credit, and Quality Jobs Programs; changes to income, franchise, and sales and use tax nexus standards; creation of a new Distressed Areas Land Assemblage Credit; and adoption of a number of sales and use tax exemptions. In vetoing House Bill 327, the Governor indicated he is prepared to summon a special legislative session if legislative leaders are willing to pass a more restrained bill that will achieve the good objectives of this legislation, such as expanding the successful Quality Jobs Program, while setting aside special projects and excessive spending items.
The following is additional information on the tax legislation signed by Governor Blunt.
Senate Bill 30
Senate Bill 30 makes a number of changes in the state’s sales and use tax laws:
- Removes the “solely in interstate commerce” requirement for the trucking exemption.
- Exempts tangible personal property and utilities used in agricultural biotechnology and plant genomics research and development.
- Exempts tangible personal property, utilities, and services used in fulfilling United States defense contracts.
- Exempts utilities, machinery, and equipment used directly in radio and television broadcasting.
- Exempts purchases and leases of tangible personal property by political subdivisions for industrial development under Chapter 100.
- Exempts certain tangible personal property used for railroad infrastructure.
- Exempts from the state sales and use tax (but not local sales and use tax) machinery, equipment, utilities, chemicals, and materials used in manufacturing, mining, or research and development related to manufacturing a product.
- Authorizes political subdivisions to enact a number of new sales and use taxes and transient guest taxes.
Senate Bill 30 also imposes new reporting requirements for property tax purposes, enacts new personal income tax credits, and exempts certain transportation authorities from the motor fuels tax. Most, but not all, of the Senate Bill 30 provisions become effective August 28, 2007.
Senate Bills 22, 81, 233, 406, and 497
This group of bills makes a number of changes in the state’s sales and use tax laws:
- Authorizes a number of new local sales and use taxes and transient guest taxes.
- Changes local transportation sales tax requirements.
- Exempts purchases by the Jackson County Sports Complex Authority.
These provisions become effective August 28, 2007.
Senate Bills 86, 162, and 577
This group of bills makes a number of changes to the state’s income tax laws:
- Revises the state adoption credit.
- Authorizes credits for certain long-term care premiums and certain donations to residential care facilities.
- Allows the Department of Revenue to intercept income tax refunds to pay debts to housing authorities.
These bills contain several effective dates, and some provisions are retroactive back to January 1, 2007.
House Bills 444, 453, and 741
This group of bills enacts new sections in both the income tax and sales and use tax laws:
- Allows a phased-in deduction for Social Security benefits and benefits received from non-private retirement systems.
- Requires that non-residents include in Missouri taxable income all non-Missouri property taxes deducted in calculating federal taxable income.
- Authorizes a deduction for qualified health insurance premiums not already deducted from the taxpayer’s federal taxable income.
- Authorizes a credit for donations to qualified food pantries.
- Authorizes an income tax credit for qualifying expenditures to make a home accessible to a disabled resident.
- Authorizes the formation of Regional Economic Development Districts with the authority to impose sales taxes.
These bills contain several effective dates, and some provisions are retroactive back to January 1, 2007.