- House Substitute -

HS/HCS/SS/SB 1248 - This act modifies various tax collection, levy, assessment and refund procedures. The act:

(1) Requires the State Treasurer each calendar quarter to calculate an annual rate of interest equal to the average rate of return on all funds invested by the State Treasurer. This calculated interest rate will be forwarded to the Department of Revenue and other applicable agencies and will be applied to situations for which the State of Missouri pays interest to entities on various overpayments received by the state. Under current law, interest applied to most overpayments is based on the adjusted prime rate charged by banks;

(2) Allows interest to be paid on state tax refunds only if payment is delayed for more than 120 days;

(3) Requires that amnesty shall be granted for all interest and additions to tax with respect to unpaid taxes that are paid in full between August 1, 2002, and September 30, 2002; such amnesty shall not apply to persons involved in a criminal or civil litigation related to the tax liability nor to persons involved in an appeal to the Administrative Hearing Commission or a protest with the department of revenue regarding such tax liability; certain other requirements must be met; the amnesty provisions of this section apply to all taxes administered by the department of revenue, i.e. includes both sales and income taxes;

(4) Repeals the compensation to employers for timely filing of state income tax withholding;

(5) Modifies multistate allocation of corporate income for Missouri corporate income tax purposes to apply multistate apportionment principles to the same;

(6) Creates a new section with respect to affiliated groups and related entities; with respect to those parties, the act modifies the way losses and operating expenses are deducted among such parties for various types of property, including intellectual property; minimum standards are established regarding what connections among various corporate entities constitute related parties and affiliated groups for multistate corporate income tax purposes;

(7) Eliminates interest on tax credits claimed carrybacks through amended returns;

(8) The act prohibits retailers from obtaining refunds of sales taxes without crediting the original purchasers, except that it allows over-collections of less than $1,000 to be refunded without the higher burden of returning the funds to the purchaser; this $1,000 threshold is an aggregate sum over a five year period. Regardless of the amount of the refund claimed, if the retailer submits amended sales tax returns showing the correct amount of gross receipts and proves that the overpaid tax was paid by the retailer and not by a purchaser, then such retailer will be entitled to a refund of the amount claimed;

(9) Increases the admission fee charged against an excursion gambling boat for each patron entering an excursion gambling boat from $2 to $3, one dollar of which shall be deposited in the schools of the future fund;

(10) Designates the revenue in the schools of the future fund to be used for funding the foundation formula; and

(11) Changes the adjusted gross receipts tax paid by excursion gambling boats to a graduated system. The percentage going to the local jurisdiction will remain the same at 2%; the portion going to the state will range from 14%-28%, increasing with adjusted gross receipts;

All increased revenues resulting from the changes in this act to fund the state education foundation formula.

The act contains an emergency clause.

JEFF CRAVER