447.708. Tax credits, criteria, conditions--definitions.
Tax credits, criteria, conditions--definitions.
447.708. 1. For eligible projects, the director of the department ofeconomic development, with notice to the directors of the departments ofnatural resources and revenue, and subject to the other provisions ofsections 447.700 to 447.718, may not create a new enterprise zone but maydecide that a prospective operator of a facility being remedied andrenovated pursuant to sections 447.700 to 447.718 may receive the taxcredits and exemptions pursuant to sections 135.100 to 135.150, RSMo, andsections 135.200 to 135.257, RSMo. The tax credits allowed pursuant tothis subsection shall be used to offset the tax imposed by chapter 143,RSMo, excluding withholding tax imposed by sections 143.191 to 143.265,RSMo, or the tax otherwise imposed by chapter 147, RSMo, or the taxotherwise imposed by chapter 148, RSMo. For purposes of this subsection:
(1) For receipt of the ad valorem tax abatement pursuant to section135.215, RSMo, the eligible project must create at least ten new jobs orretain businesses which supply at least twenty-five existing jobs. Thecity, or county if the eligible project is not located in a city, mustprovide ad valorem tax abatement of at least fifty percent for a period notless than ten years and not more than twenty-five years;
(2) For receipt of the income tax exemption pursuant to section135.220, RSMo, and tax credit for new or expanded business facilitiespursuant to sections 135.100 to 135.150, and 135.225, RSMo, the eligibleproject must create at least ten new jobs or retain businesses which supplyat least twenty-five existing jobs, or combination thereof. For purposesof sections 447.700 to 447.718, the tax credits described in section135.225, RSMo, are modified as follows: the tax credit shall be fourhundred dollars per employee per year, an additional four hundred dollarsper year for each employee exceeding the minimum employment thresholds often and twenty-five jobs for new and existing businesses, respectively, anadditional four hundred dollars per year for each person who is a persondifficult to employ as defined by section 135.240, RSMo, and investment taxcredits at the same amounts and levels as provided in subdivision (4) ofsubsection 1 of section 135.225, RSMo;
(3) For eligibility to receive the income tax refund pursuant tosection 135.245, RSMo, the eligible project must create at least ten newjobs or retain businesses which supply at least twenty-five existing jobs,or combination thereof, and otherwise comply with the provisions of section135.245, RSMo, for application and use of the refund and the eligibilityrequirements of this section;
(4) The eligible project operates in compliance with applicableenvironmental laws and regulations, including permitting and registrationrequirements, of this state as well as the federal and local requirements;
(5) The eligible project operator shall file such reports as may berequired by the director of economic development or the director'sdesignee;
(6) The taxpayer may claim the state tax credits authorized by thissubsection and the state income exemption for a period not in excess of tenconsecutive tax years. For the purpose of this section, "taxpayer" meansan individual proprietorship, partnership or corporation described insection 143.441 or 143.471, RSMo, who operates an eligible project. Thedirector shall determine the number of years the taxpayer may claim thestate tax credits and the state income exemption based on the projected netstate economic benefits attributed to the eligible project;
(7) For the purpose of meeting the new job requirement prescribed insubdivisions (1), (2) and (3) of this subsection, it shall be required thatat least ten new jobs be created and maintained during the taxpayer's taxperiod for which the credits are earned, in the case of an eligible projectthat does not replace a similar facility in Missouri. "New job" means aperson who was not previously employed by the taxpayer or related taxpayerwithin the twelve-month period immediately preceding the time the personwas employed by that taxpayer to work at, or in connection with, theeligible project on a full-time basis. "Full-time basis" means theemployee works an average of at least thirty-five hours per week during thetaxpayer's tax period for which the tax credits are earned. For thepurposes of this section, related taxpayer has the same meaning as definedin subdivision (9) of section 135.100, RSMo;
(8) For the purpose of meeting the existing job retentionrequirement, if the eligible project replaces a similar facility thatclosed elsewhere in Missouri prior to the end of the taxpayer's tax periodin which the tax credits are earned, it shall be required that at leasttwenty-five existing jobs be retained at, and in connection with theeligible project, on a full-time basis during the taxpayer's tax period forwhich the credits are earned. "Retained job" means a person who waspreviously employed by the taxpayer or related taxpayer, at a facilitysimilar to the eligible project that closed elsewhere in Missouri prior tothe end of the taxpayer's tax period in which the tax credits are earned,within the tax period immediately preceding the time the person wasemployed by the taxpayer to work at, or in connection with, the eligibleproject on a full-time basis. "Full-time basis" means the employee worksan average of at least thirty-five hours per week during the taxpayer's taxperiod for which the tax credits are earned;
(9) In the case where an eligible project replaces a similar facilitythat closed elsewhere in Missouri prior to the end of the taxpayer's taxperiod in which the tax credits are earned, the owner and operator of theeligible project shall provide the director with a written statementexplaining the reason for discontinuing operations at the closed facility.The statement shall include a comparison of the activities performed at theclosed facility prior to the date the facility ceased operating, to theactivities performed at the eligible project, and a detailed accountdescribing the need and rationale for relocating to the eligible project.If the director finds the relocation to the eligible project significantlyimpaired the economic stability of the area in which the closed facilitywas located, and that such move was detrimental to the overall economicdevelopment efforts of the state, the director may deny the taxpayer'srequest to claim tax benefits;
(10) Notwithstanding any provision of law to the contrary, for thepurpose of this section, the number of new jobs created and maintained, thenumber of existing jobs retained, and the value of new qualified investmentused at the eligible project during any tax year shall be determined bydividing by twelve, in the case of jobs, the sum of the number ofindividuals employed at the eligible project, or in the case of newqualified investment, the value of new qualified investment used at theeligible project, on the last business day of each full calendar month ofthe tax year. If the eligible project is in operation for less than theentire tax year, the number of new jobs created and maintained, the numberof existing jobs retained, and the value of new qualified investmentcreated at the eligible project during any tax year shall be determined bydividing the sum of the number of individuals employed at the eligibleproject, or in the case of new qualified investment, the value of newqualified investment used at the eligible project, on the last business dayof each full calendar month during the portion of the tax year during whichthe eligible project was in operation, by the number of full calendarmonths during such period;
(11) For the purpose of this section, "new qualified investment"means new business facility investment as defined and as determined insubdivision (7) of section 135.100, RSMo, which is used at and inconnection with the eligible project. "New qualified investment" shall notinclude small tools, supplies and inventory. "Small tools" means toolsthat are portable and can be hand held.
2. The determination of the director of economic development pursuantto subsection 1 of this section shall not affect requirements for theprospective purchaser to obtain the approval of the granting of realproperty tax abatement by the municipal or county government where theeligible project is located.
3. (1) The director of the department of economic development, withthe approval of the director of the department of natural resources, may,in addition to the tax credits allowed in subsection 1 of this section,grant a remediation tax credit to the applicant for up to one hundredpercent of the costs of materials, supplies, equipment, labor, professionalengineering, consulting and architectural fees, permitting fees andexpenses, demolition, asbestos abatement, and direct utility charges forperforming the voluntary remediation activities for the preexistinghazardous substance contamination and releases, including, but not limitedto, the costs of performing operation and maintenance of the remediationequipment at the property beyond the year in which the systems andequipment are built and installed at the eligible project and the costs ofperforming the voluntary remediation activities over a period not in excessof four tax years following the taxpayer's tax year in which the system andequipment were first put into use at the eligible project, provided theremediation activities are the subject of a plan submitted to, and approvedby, the director of natural resources pursuant to sections 260.565 to260.575, RSMo. The tax credit may also include up to one hundred percentof the costs of demolition that are not directly part of the remediationactivities, provided that the demolition is on the property where thevoluntary remediation activities are occurring, the demolition is necessaryto accomplish the planned use of the facility where the remediationactivities are occurring, and the demolition is part of a redevelopmentplan approved by the municipal or county government and the department ofeconomic development. The demolition may occur on an adjacent property ifthe project is located in a municipality which has a population less thantwenty thousand and the above conditions are otherwise met. The adjacentproperty shall independently qualify as abandoned or underutilized. Theamount of the credit available for demolition not associated withremediation cannot exceed the total amount of credits approved forremediation including demolition required for remediation.
(2) The amount of remediation tax credits issued shall be limited tothe least amount necessary to cause the project to occur, as determined bythe director of the department of economic development.
(3) The director may, with the approval of the director of naturalresources, extend the tax credits allowed for performing voluntaryremediation maintenance activities, in increments of three-year periods,not to exceed five consecutive three-year periods. The tax credits allowedin this subsection shall be used to offset the tax imposed by chapter 143,RSMo, excluding withholding tax imposed by sections 143.191 to 143.265,RSMo, or the tax otherwise imposed by chapter 147, RSMo, or the taxotherwise imposed by chapter 148, RSMo. The remediation tax credit may betaken in the same tax year in which the tax credits are received or may betaken over a period not to exceed twenty years.
(4) The project facility shall be projected to create at least tennew jobs or at least twenty-five retained jobs, or a combination thereof,as determined by the department of economic development, to be eligible fortax credits pursuant to this section.
(5) No more than seventy-five percent of earned remediation taxcredits may be issued when the remediation costs were paid, and theremaining percentage may be issued when the department of natural resourcesissues a letter of completion letter or covenant not to sue followingcompletion of the voluntary remediation activities. It shall not includeany costs associated with ongoing operational environmental compliance ofthe facility or remediation costs arising out of spills, leaks, or otherreleases arising out of the ongoing business operations of the facility.In the event the department of natural resources issues a letter ofcompletion for a portion of a property, an impacted media such as soil orgroundwater, or for a site or a portion of a site improvement, a proratedamount of the remaining percentage may be released based on the percentageof the total site receiving a letter of completion.
4. In the exercise of the sound discretion of the director of thedepartment of economic development or the director's designee, the taxcredits and exemptions described in this section may be terminated,suspended or revoked, if the eligible project fails to continue to meet theconditions set forth in this section. In making such a determination, thedirector shall consider the severity of the condition violation, actionstaken to correct the violation, the frequency of any condition violationsand whether the actions exhibit a pattern of conduct by the eligiblefacility owner and operator. The director shall also consider changes ingeneral economic conditions and the recommendation of the director of thedepartment of natural resources, or his or her designee, concerning theseverity, scope, nature, frequency and extent of any violations of theenvironmental compliance conditions. The taxpayer or person claiming thetax credits or exemptions may appeal the decision regarding termination,suspension or revocation of any tax credit or exemption in accordance withthe procedures outlined in subsections 4 to 6 of section 135.250, RSMo.The director of the department of economic development shall notify thedirectors of the departments of natural resources and revenue of thetermination, suspension or revocation of any tax credits as determined inthis section or pursuant to the provisions of section 447.716.
5. Notwithstanding any provision of law to the contrary, no taxpayershall earn the tax credits, exemptions or refund otherwise allowed insubdivisions (2), (3) and (4) of subsection 1 of this section and the taxcredits otherwise allowed in section 135.110, RSMo, or the tax credits,exemptions and refund otherwise allowed in sections 135.215, 135.220,135.225 and 135.245, RSMo, respectively, for the same facility for the sametax period.
6. The total amount of the tax credits allowed in subsection 1 ofthis section may not exceed the greater of:
(1) That portion of the taxpayer's income attributed to the eligibleproject; or
(2) One hundred percent of the total business' income tax if theeligible facility does not replace a similar facility that closed elsewherein Missouri prior to the end of the taxpayer's tax period in which the taxcredits are earned, and further provided the taxpayer does not operate anyother facilities besides the eligible project in Missouri; fifty percent ofthe total business' income tax if the eligible facility replaces a similarfacility that closed elsewhere in Missouri prior to the end of thetaxpayer's tax period in which the credits are earned, and further providedthe taxpayer does not operate any other facilities besides the eligibleproject in Missouri; or twenty-five percent of the total business income ifthe taxpayer operates, in addition to the eligible facility, any otherfacilities in Missouri. In no case shall a taxpayer operating more thanone eligible project in Missouri be allowed to offset more than twenty-fivepercent of the taxpayer's business income in any tax period. That portionof the taxpayer's income attributed to the eligible project as referencedin subdivision (1) of this subsection, for which the credits allowed insections 135.110 and 135.225, RSMo, and subsection 3 of this section, mayapply, shall be determined in the same manner as prescribed in subdivision(6) of section 135.100, RSMo. That portion of the taxpayer's franchise taxattributed to the eligible project for which the remediation tax credit mayoffset, shall be determined in the same manner as prescribed in paragraph(a) of subdivision (6) of section 135.100, RSMo.
7. Taxpayers claiming the state tax benefits allowed in subdivisions(2) and (3) of subsection 1 of this section shall be required to file allapplicable tax credit applications, forms and schedules prescribed by thedirector during the taxpayer's tax period immediately after the tax periodin which the eligible project was first put into use. Otherwise, thetaxpayer's right to claim such state tax benefits shall be forfeited.Unused business facility and enterprise zone tax credits shall not becarried forward but shall be initially claimed for the tax period duringwhich the eligible project was first capable of being used, and during anyapplicable subsequent tax periods.
8. Taxpayers claiming the remediation tax credit allowed insubsection 3 of this section shall be required to file all applicable taxcredit applications, forms and schedules prescribed by the director duringthe taxpayer's tax period immediately after the tax period in which theeligible project was first put into use, or during the taxpayer's taxperiod immediately after the tax period in which the voluntary remediationactivities were performed.
9. The recipient of remediation tax credits, for the purpose of thissubsection referred to as assignor, may assign, sell or transfer, in wholeor in part, the remediation tax credit allowed in subsection 3 of thissection to any other person, for the purpose of this subsection referred toas assignee. To perfect the transfer, the assignor shall provide writtennotice to the director of the assignor's intent to transfer the tax creditsto the assignee, the date the transfer is effective, the assignee's name,address and the assignee's tax period and the amount of tax credits to betransferred. The number of tax periods during which the assignee maysubsequently claim the tax credits shall not exceed twenty tax periods,less the number of tax periods the assignor previously claimed the creditsbefore the transfer occurred.
10. In the case where an operator and assignor of an eligible projecthas been certified to claim state tax benefits allowed in subdivisions (2)and (3) of subsection 1 of this section, and sells or otherwise transferstitle of the eligible project to another taxpayer or assignee who continuesthe same or substantially similar operations at the eligible project, thedirector shall allow the assignee to claim the credits for a period of timeto be determined by the director; except that, the total number of taxperiods the tax credits may be earned by the assignor and the assigneeshall not exceed ten. To perfect the transfer, the assignor shall providewritten notice to the director of the assignor's intent to transfer the taxcredits to the assignee, the date the transfer is effective, the assignee'sname, address, and the assignee's tax period, and the amount of tax creditsto be transferred.
11. For the purpose of the state tax benefits described in thissection, in the case of a corporation described in section 143.471, RSMo,or partnership, in computing Missouri's tax liability, such state benefitsshall be allowed to the following:
(1) The shareholders of the corporation described in section 143.471,RSMo;
(2) The partners of the partnership.
The credit provided in this subsection shall be apportioned to the entitiesdescribed in subdivisions (1) and (2) of this subsection in proportion totheir share of ownership on the last day of the taxpayer's tax period.
(L. 1995 H.B. 414, A.L. 1996 H.B. 1237, A.L. 1998 S.B. 827, A.L. 2001 H.B. 133, A.L. 2008 H.B. 2058 merged with S.B. 718, A.L. 2009 H.B. 191)CROSS REFERENCE:
Tax Credit Accountability Act of 2004, additional requirements, RSMo 135.800 to 135.830