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HCS/HB 191 - This act allows business headquarters to receive tax credits for new or expanding businesses. Expansions at headquarter facilities will be considered separate business facilities and entitled to the credits if at least twenty-five new employees and at least one million dollars of new investment are attributed to the expansion. Buildings on multiple noncontiguous properties will be considered one facility if they are in the same county or within the same municipality. No headquarters will receive the credits for facilities commencing or expanding operations after January 1, 2020. Beginning January 1, 2009, taxpayers may receive a tax credit equal to one hundred percent of the state sales tax paid on any new motor vehicle assembled and purchased in Missouri on or after that date. The tax credit may be claimed against a taxpayer's income tax; corporate franchise tax; financial institutions tax; or bridge, express, and public utility companies tax. Any political entity may exempt these sales from the local sales tax by an order or ordinance. The provisions regarding tax credits on the sales tax paid on new vehicles assembled and purchased in Missouri will expire December 31st six years from the effective date. The act authorizes a state and local sales tax exemption for all electrical energy, gas, other utilities including telecommunications services, and machinery or equipment used by a business that, after August 28, 2009, relocates its facility to one that is located within a portion of an underground mine that is no longer used for mining, and which has at least 500,000 square feet of space. The facility must be used for data processing, hosting, Internet publishing and broadcasting, and web search portals. The business cannot receive these exemptions and simultaneously receive benefits from the Quality Jobs Program. The Department of Economic Development is authorized to allocate up to five million dollars in tax credits per year to encourage equity investment in technology-based early stage Missouri companies, commonly known as angel investments. Investors who contribute the first five hundred thousand dollars in equity investment to a qualified Missouri business may be issued a tax credit equal to thirty percent of the investment or forty percent if the qualified business is in a rural area or distressed community. An investor can receive a credit of up to fifty thousand dollars for an investment in a single, qualified business or up to one hundred thousand dollars for investments in more than one qualified business per year. Credits can be carried forward for up to three years or transferred. The total amount of tax credits that can be authorized for the Small Business Incubator Program in any taxable year is increased from five hundred thousand dollars to one million dollars. Currently, rural empowerment zones are only allowed to exist in Hickory County, which has a population of eight thousand nine hundred twenty-five residents. The act allows these zones to exist in any county with eighteen thousand or fewer residents, which includes fifty-six counties. The act also prohibits more than two rural empowerment zones in any county. The definition of "technology business project" as it relates to the Missouri Quality Jobs Act is modified to include certain clinical molecular diagnostic laboratories. The act specifies that if the department fails to respond within thirty days to a Quality Jobs Program applicant's notice of intent, the notice is deemed a disapproval. Currently, the notice is deemed an approval if the department fails to respond within thirty days. The act specifies how the department must apply certain definitions when a business that has already received an approved notice of intent later files another notice of intent and eliminates the five hundred thousand dollar per-company annual cap on tax credits for technology business projects and the seven hundred and fifty thousand dollar per-company annual cap on tax credits for high-impact projects. A qualified company which wants to receive tax credits for job retention projects under the program may do so if it has maintained the lesser of one percent of the average number of total employees in the county in which the project is located during the previous twelve months or seven hundred fifty full-time employees and the qualified company agrees to maintain at least the same number of full-time employees during the period for which it receives benefits as it did when it applied for the benefits. Currently, a qualified company must have maintained at least one thousand full-time employees. The act modifies other conditions for qualified companies to receive these tax credits. The annual cap on job retention projects is increased from three million dollars to thirty million dollars. The department is allowed to issue tax credits for approved job retention projects until August 30, 2015. Currently, tax credits for job retention projects cannot be issued after August 30, 2013. The sixty million dollar annual cap on quality jobs tax credits is completely removed. The act establishes the Small Business and Entrepreneurial Growth Act which, beginning January 1, 2010, allows small business employers who increase their total payroll by increasing the number of jobs and meeting certain qualifications to retain the Missouri withholding tax from the salaries of the newly created jobs for one year. If the employer provides health insurance pays at least 50% of the cost of the premiums for all employees, the withholding tax can be retained for two years. In either case, wages for the new jobs must equal or exceed the county average wage. No employer retaining these withholding taxes will be eligible for the benefits under the Quality Jobs Act. Currently, no qualified equity investments can be made under the New Markets Tax Credit Program beyond fiscal year 2010. The act extends the date through FY 2012 and increases the program's tax credit cap from fifteen million dollars to twenty-seven million five hundred thousand dollars per fiscal year. The act allows contributions to a downtown revitalization preservation development project from any private not-for-profit organization or local contributions from tax abatement or other sources to be replace on a dollar-for-dollar basis the local match of the one hundred percent allocation of payments in lieu of taxes and economic activity taxes from the development's fund. Currently, no tax credits for qualified research expenses can be approved, awarded, or issued. The substitute removes these restrictions and allows a tax credit equal to no more than 6.5% of a taxpayer's qualified research expenses. The department is prohibited from issuing more than ten million dollars in tax credits for qualified research expenses annually. Qualified research expenses will be limited to those incurred in the research and development of agricultural biotechnology, plant genomics products, diagnostic and therapeutic medical devices, and prescription pharmaceuticals consumed by humans or animals. Expenses incurred in the research, development, or manufacturing of power system technology for aerospace, space, defense, or implantable or wearable medical devices are also permitted. The director of the department may allow a taxpayer to transfer up to forty percent of tax credits issued, but not yet claimed, between January 1, 2010, and December 31, 2016. The act requires the director to act between August 1 and August 15 on tax credit applications filed between January 1 and July 1 for claims from the previous year. The formula is specified by which tax credits will be issued if the eligible claims for the credits exceed the annual cap. No one taxpayer can be issued more than thirty percent of the total amount of tax credits authorized in any calendar year. The governing body of any municipality may establish a business, education, science, and technology (BEST) district. BEST projects may be implemented in the district according to a BEST plan. The district, plan, and project must be established or adopted by ordinance. The act specifies the requirements of a BEST plan and the findings a municipality must make before adopting a BEST plan. Following a municipality's establishment of a BEST district and adoption of a BEST plan and one or more BEST projects, the BEST revenues estimated for the businesses within the BEST district will be available for appropriation by the General Assembly from the General Revenue Fund to the department for distribution to the treasurer of the municipality. Municipalities cannot commit any BEST revenues prior to an appropriation being made from the General Revenue Fund to the department for a particular BEST project. The municipality's treasurer will deposit the BEST revenues into a segregated BEST Projects Financing Fund. The State Treasurer will be the custodian of the fund and may approve disbursements. The initial appropriation or disbursement will not be made until the department director has approved a BEST plan and projects. The act specifies that "BEST revenues" mean: fifty percent of the incremental increase in the general revenue portion of eligible state sales tax revenues received under Section 144.020, RSMo; and state income taxes withheld from new employees by the employers at the businesses located within the BEST project. Sales tax revenue attributable to retail sales will only be included in this amount if it can be proven that the sales tax revenue is attributable to new sources which did not exist in the state in the baseline year. The act requires the director of the Department of Economic Development to approve a BEST plan and projects if certain findings are made. BEST district will not have the power to acquire any real property by eminent domain. Revenues will only be used to pay for specified eligible BEST project costs. The municipality is required to submit an annual report to the department which includes certain specified information. The act contains an emergency clause. JASON ZAMKUS
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