Missouri Senate

Perfected

The act authorizes the Director of Revenue to choose to send certain documents by first class mail, if the director sent at least one notice of deficiency or assessment by certified mail to the last known address. (Section 32.058)

The Director of the Department of Revenue is authorized to retain one percent of the amount of any local sales or use taxes collected by the department for the cost of collection. (Section 32.087).

The act provides taxpayers with amnesty from the assessment or payment of all penalties, additions to tax, and interest on delinquencies of unpaid taxes administered by the department which occurred on or prior to December 31, 2011. To receive amnesty under the act, a taxpayer must: apply for amnesty; file a tax return for each tax period for which amnesty is requested; pay the unpaid taxes in full from August 1, 2012, to October 31, 2012; and agree to comply with state tax laws for the next eight years from the date of the agreement. All new revenues resulting from the tax amnesty program will be deposited into the General Revenue Fund unless otherwise earmarked by the Missouri Constitution or by state statute. (Section 32.383).

The Director of the Department of Revenue and the Commissioner of the Office of Administration may enter into a reciprocal agreement with the federal government or any other state to offset vendor and contractor payments for any type of debt owed to the state. Currently, the department has a reciprocal agreement with the United States Treasury to offset income tax overpayments. (Section 32.385).

State agencies, community college districts, and state and municipal courts may refer any debt owed to them to the Department of Revenue for collection. The department and the referring state agency may exchange necessary information but must comply with federal and state laws regarding the confidentiality of information and records. The department may compromise any referred state debt and use all general remedies afforded creditors of Missouri, remedies specific to the referring state agency, and remedies afforded the state in general.

The department can employ staff, attorneys,, prosecuting attorneys, and private collection agencies to aid in the collection of debt. The department must add 10% to the amount of debt to be collected for the cost of collection which may be waived under certain conditions. Collections costs shall be deposited in state general revenue. (Sections 32.028, 32.420, 32.430, 32.440, 32.450, 32.460).

Anyone making a claim or having a judgment under the provisions of the State Legal Expense Fund must have a no-tax due statement from the department before any moneys can be expended from the fund for the settlement of any liability claim. The act allows an offset from the State Legal Expense Fund to satisfy any delinquent tax debt owed before payment is made to the person. Payments of $10,000 or less from the fund for property damage claims are not required to have a no-tax due statement. (Section 105.716).

The Director of Revenue may issue an administrative garnishment once he or she has filed a certificate of lien in the circuit court for delinquent income or sales or use taxes. Any person receiving this order must turn over any of the taxpayer's assets in his or her possession and any assets that are to become due the taxpayer including wages, salaries, commissions, bonuses, workers' compensation benefits, disability benefits, pension or retirement payments, and interest less a fee to cover costs of no more than $6 per month. The taxpayer may obtain relief from the garnishment by paying the total amount owed. (Section 140.910).

The act also creates an individual income tax deduction for business income. The amount of this deduction will increase over a five year period, if the office of administration determines that each year the combined corporate and individual income tax revenues from the fiscal year before that tax year were equal to or greater than the income tax revenues from FY 2010. If the combined corporate and individual income tax revenues from the fiscal year before that tax year are less than the income tax revenues from FY 2010, then the deduction will be the same percentage of business income it was in the tax year before that year. Once fully phased-in, taxpayers will be allowed a fifty percent deduction for business income for all subsequent tax years. Shareholders of S corporations and partners in partnerships will be allowed a proportional deduction based their share of ownership. (Section 143.013)

This act reduces the corporate income tax rate from its current six and one-forth percent of Missouri taxable income. This reduction will occur over a five year period, if the Office of Administration determines that each year the combined corporate and individual income tax revenues from the fiscal year before that tax year were equal to or greater than the income tax revenues from FY 2010. If the combined corporate and individual income tax revenues from the fiscal year before that tax year are less than the income tax revenues from FY 2010, then the corporate income tax rate will be the same rate it was in the tax year before that year. Once fully phased-in, taxable corporate income will be taxed at three and one-eighth percent for all subsequent tax years. (Section 143.071)

This act authorizes an exemption from state sales and use tax for all utilities, chemicals, machinery, equipment, supplies, parts and materials used in testing, installing, calibrating, maintaining, repairing, or restoring any machinery or equipment that is exempt from sales and use tax under section 144.054. This act also authorizes an exemption from state sales and use tax for all utilities, chemicals, machinery, equipment, supplies, parts and materials used in manufacturing, processing, preparing, furnishing, compounding, or producing food, including research and development related to food manufacturing, processing, preparing, furnishing, compounding, and production. (Section 144.055)

For two calendar years, starting in January 2013, this act creates a seven-day state sales tax holiday for products that are made in the United States. The first fifteen thousand dollars of each purchase of a product made in the United States will be exempt from sales tax. Political subdivisions may extend this sales tax holiday by order or ordinance to local sales taxes. Sales of motor vehicles are not exempt from sales tax during this holiday. Retailers who do not have at least two percent of their merchandise qualifying for the sales tax holiday are required to offer a sales tax refund rather than participate in the sales tax holiday. (Section 144.059)

This act also modifies the procedures for seeking a refund of sales taxes, penalties , or interest collected or computed in error or illegally. The Director of Revenue is required to hold a refund claim unprocessed at a taxpayer's request pending the outcome of legal proceedings on the same or similar grounds or transactions. A purchaser is allowed to submit a claim for a refund of the sales tax directly to the Director of Revenue. The purchaser is allowed to appeal the decision to deny a refund within sixty days of the date the notice of denial is mailed. A decision of the director to deny a refund claim based solely on the issue of the exemption of the electronic transmission or delivery of computer software that occurred on or after January 1, 2007, will be appealable by the purchaser, if the purchaser appealed by September 28, 2012. (Section 144.190).

The provision regarding tax amnesty has an emergency clause.

Provisions of this act are identical to HCS/HB 1030 (2012) and similar to provisions of SB 661 (2012), HB 116 (2011), HCS/SB 117 (2011), and SCS/SB 146 (2011).

EMILY KALMER