Perfected

QUALITY JOBS PROGRAM

The act:

(1) Eliminates the cap on the amount of tax credits that can be issued in a calendar year for the program. Currently, the cap is $12 million per year;

(2) Allows tax credits to offset taxes due from financial institutions under Chapter 148, RSMo. Currently, the credits can only be used to offset state income taxes imposed by Chapter 143;

(3) Modifies the definition of "withholding tax" to a computation using a schedule determined by the Department of Economic Development based on average wages. Currently, the definition is the state tax imposed by Sections 143.191 - 143.265;

(4) Allows the calendar year's maximum amount of quality jobs tax credits issued to a qualifying company that participates in both the Quality Jobs Program and the New Job Training Program to be increased by an amount equivalent to the withholding tax retained by that company under the New Job Training Program if the combined benefits do not exceed the projected state benefits of the project;

(5) Requires that if the calendar year's annual maximum amount of quality jobs tax credits issued to any qualified company is increased by $1 million, the number of new jobs must exceed 500. Currently, this increase in tax credits can occur by receiving the approval of the department and the Quality Jobs Advisory Task Force;

(6) Specifies the method in which the county average wage will be calculated when a qualified company relocates employees from one county to another;

(7) Revises the definition of "full-time employee" from an employee who works an average of 35 hours per week to an employee of the qualified company that is scheduled to work an average of 35 hours per week, but leaves the remaining requirements of the definition unchanged;

(8) Changes the calculation of "new direct local revenue" so that local earnings taxes are excluded;

(9) Specifies that no jobs created before the notice of intent will be considered new jobs;

(10) Specifies the method in which new payroll will be calculated;

(11) Adds educational services, religious organizations, public administration, and utilities regardless of whether or not they are regulated by the Missouri Public Service Commission to the list of entities which are prohibited from being qualified companies. However, headquarters or administrative offices which would otherwise be excluded may qualify for benefits if the offices serve a multi-state territory;

(12) Allows qualified companies to retain withholding taxes once the minimum number of new jobs has been attained and the county average wage has been exceeded;

(13) Requires the department to verify through the Department of Revenue that the tax credit applicant does not owe any delinquent taxes, interest, or penalties and to verify through the Department of Insurance, Financial Institutions, and Professional Registration that the applicant does not owe any delinquent insurance taxes prior to issuing any tax credits. The amount of tax credits issued will be reduced by any tax delinquency; and

(14) Requires any taxpayer who receives state tax credits or withholding taxes under this program to forfeit future benefits and repay any tax credits already redeemed and withholding taxes already retained if the taxpayer knowingly hires individuals who are not allowed to work legally in the United States.

ENHANCED ENTERPRISE ZONE PROGRAM

The act:

(1) Eliminates the cap on the amount of tax credits that can be issued in a calendar year for the program. Currently, the cap is $7 million per year;

(2) Modifies the definition of an "employee" to a person employed by the enhanced business enterprise that is scheduled to work an average of at least 1,000 hours per year. Health insurance must be offered to employees at all times and must be partially paid by the employer. Currently, the definition of an "employee" includes full-time, part-time, and seasonal employees;

(3) Adds educational services, religious organizations, and public administration to the list of entities which are prohibited from being enhanced business enterprises. However, headquarters or administrative offices which would otherwise be excluded may qualify for benefits if the offices serve a multi-state territory. Currently, utilities regulated by the Missouri Public Service Commission are excluded from being an enhanced business enterprise. The act changes this to public utilities with a NAICS code 221, including water and sewer services;

(4) Allows speculative industrial or warehouse buildings constructed by a public entity, or a private entity if the land is leased by a public entity, to be exempt from ad valorem taxes, upon the approval of the governing authority. If the speculative building is owned by a private entity, the exemption cannot exceed two years. If it is owned or leased by a public entity, the exemption cannot exceed five years. Currently, only enhanced business enterprises can be exempt from these taxes;

(5) Requires the department to verify through the Department of Revenue that the tax credit applicant does not owe any delinquent taxes, interest, or penalties and to verify through the Department of Insurance, Financial Institutions, and Professional Registration that the applicant does not owe any delinquent insurance taxes prior to issuing any tax credits. The amount of tax credits issued will be reduced by any tax delinquency;

(6) Allows the department to designate technology and trade zones within an enhanced enterprise zone. Conducting business with a company in a technology and trade zone will not be considered sufficient for establishing nexus for purposes of taxation. Clients solely doing business with a company located in the technology and trade zone will not be required to pay Missouri taxes; and

(7) Requires any taxpayer who receives state tax credits under this program to forfeit future tax credits and repay any credits already redeemed if the taxpayer knowingly hires individuals who are not allowed to work legally in the United States.

NEW JOBS TRAINING PROGRAM

The act:

(1) Allows community college districts to sell certificates until July 1, 2018. Currently, they cannot sell certificates after July 1, 2008; and

(2) Extends the program until July 1, 2028. Currently, it will expire on July 1, 2018.

JASON ZAMKUS