Bill Text: MO HB1091 | 2014 | Regular Session | Engrossed
Bill Title: Authorizes three new tax credits for port facilities
Spectrum: Partisan Bill (Republican 2-0)
Status: (Engrossed - Dead) 2014-04-23 - Public Hearing Held (S) [HB1091 Detail]
Download: Missouri-2014-HB1091-Engrossed.html
SECOND REGULAR SESSION
[PERFECTED]
HOUSE COMMITTEE SUBSTITUTE FOR
97TH GENERAL ASSEMBLY
4204H.03P D. ADAM CRUMBLISS, Chief Clerk
AN ACT
To amend chapter 135, RSMo, by adding thereto four new sections relating to port facilities.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Chapter 135, RSMo, is amended by adding thereto four new sections, to be known as sections 135.1660, 135.1662, 135.1664, and 135.1666, to read as follows:
135.1660. As used in sections 135.1662 to 135.1666, unless the context requires a different meaning, the following terms shall mean:
(1) "Department", the department of economic development;
(2) "Director", the director of the department of economic development;
(3) "State tax liability", in the case of a business taxpayer, any liability incurred by such taxpayer under the provisions of chapters 143, 147, 148, and 153, exclusive of the provisions relating to the withholding of tax as provided for in sections 143.191 to 143.265 and related provisions and in the case of an individual taxpayer, any liability incurred by such taxpayer under the provisions of chapter 143, exclusive of the provisions relating to the withholding of tax as provided for in sections 143.191 to 143.265;
(4) "Taxpayer", a person, firm, partner in a firm, member of a limited liability company, corporation, or shareholder in an S corporation doing business in the state of Missouri and subject to the state income tax imposed by the provisions of chapter 143, or a corporation subject to the annual corporation franchise tax imposed by the provisions of chapter 147, or an insurance company paying an annual tax on its gross premium receipts in this state, or other financial institution paying taxes to the state of Missouri or any political subdivision of this state under the provisions of chapter 148, or an express company which pays an annual tax on its gross receipts in this state under chapter 153.
135.1662. 1. As used in this section, unless the context clearly indicates otherwise, the following terms shall mean:
(1) "Base year port cargo volume", the total amount of net tons of non-containerized cargo or twenty-foot equivalent units (TEUs) of cargo actually transported by way of a waterborne ship or vehicle through a port facility during the period from January 1, 2013, through December 31, 2013. Base year port cargo volume must be at least seventy-five net tons of non-containerized cargo or ten loaded TEUs for a taxpayer to be eligible for the credits provided in this section. For a taxpayer that does not ship that amount in the year ending December 31, 2013, including a taxpayer who locates to Missouri after December 31, 2013, the base cargo volume will be measured by the initial January first through December thirty-first calendar year in which it meets the requirements of seventy-five net tons of non-containerized cargo or ten loaded TEUs. Base year port cargo volume must be recalculated each calendar year after the initial base year;
(2) "Major facility", a new facility to be located in Missouri that is projected to import or export cargo through a port in excess of twenty-five thousand TEUs or the non-containerized cargo equivalent in its first calendar year;
(3) "Port cargo volume", the total amount of net tons of non-containerized cargo or containers measured in TEUs of cargo transported by way of a waterborne ship or vehicle through a port facility;
(4) "Port facility", any publicly or privately owned facility located within Missouri through which cargo is transported by way of a waterborne ship or vehicle to or from destinations outside the state and handles cargo owned by third parties in addition to cargo owned by the port facility's owner; and
(5) "TEU" or "Twenty-foot equivalent unit", a volumetric measure based on the size of a container that is twenty feet long by eight feet wide by eight feet, six inches high. If using weight as a measure, then one TEU shall equal 16 tons of noncontainerized cargo.
2. (1) For taxable years beginning on or after January 1, 2014, but before January 1, 2020, a taxpayer engaged in the manufacturing of goods or the distribution of manufactured goods that uses port facilities in this state and increases its port cargo volume at these facilities by a minimum of five percent in a single calendar year over its base year port cargo volume, shall be allowed to claim a tax credit against the taxpayer's state tax liability in an amount determined by the department. The department may waive the requirement that port cargo volume be increased by a minimum of five percent over base year port cargo volume for any taxpayer that qualifies as a major facility.
(2) Qualifying taxpayers that increase their port cargo volume by a minimum of five percent in a qualifying calendar year shall be allowed to claim a fifty dollar tax credit against the taxpayer's state tax liability for each TEU or the non-containerized cargo equivalent above the base year port cargo volume. A qualifying taxpayer that is a major facility as defined in this section shall be allowed to claim a fifty dollar tax credit against the taxpayer's state tax liability for each TEU or the non-containerized cargo equivalent transported through a port facility during the major facility's first calendar year. A qualifying taxpayer may not receive more than two hundred fifty thousand dollars for each calendar year except as provided for in subdivision (2) of subsection 3. The maximum amount of credits allowed for all qualifying taxpayers under this section shall not exceed three million five hundred thousand dollars for each calendar year. The department shall allocate the credits under the provisions in subdivisions (1) and (2) of subsection 3.
(3) If the credit exceeds the taxpayer's tax liability for the taxable year, the excess amount may be carried forward and claimed against income taxes in the next five succeeding taxable years.
(4) The credit may be claimed by the taxpayer as provided in subdivision (1) of this subsection only if the taxpayer owns the cargo at the time the port facilities are used.
3. (1) For every year in which a taxpayer claims the credit, the taxpayer shall submit an application to the department by March first of the calendar year after the calendar year in which the increase in port cargo volume occurs. The taxpayer shall attach a schedule to the taxpayer's application to the department with the following information and any other information requested by the department:
(a) A description of how the base year port cargo volume and the increase in port cargo volume were determined;
(b) The amount of the base year port cargo volume;
(c) The amount of the increase in port cargo volume for the taxable year stated both as a percentage increase and as a total increase in net tons of non-containerized cargo and TEUs of cargo, including information that demonstrates an increase in port cargo volume in excess of the minimum amount required to claim the tax credits under this section;
(d) Any tax credit utilized by the taxpayer in prior years; and
(e) The amount of tax credit carried over from prior years.
(2) If on March fifteenth of each year the cumulative amount of tax credits requested by qualifying taxpayers for the prior year exceeds three million five hundred thousand dollars, then the three million five hundred thousand dollars in credits shall be prorated among the qualifying taxpayers who requested the credit.
(3) The taxpayer shall claim the credit on its income tax return in a manner prescribed by the department of revenue, and the department may require a copy of the certification form issued by a Missouri port authority be attached to the return or otherwise provided.
4. Credits granted to a partnership, limited liability company, or electing small business corporation (S corporation) shall be allocated to the individual partners, members, or shareholders respectively in proportion to their ownership interests in such business entities.
135.1664. 1. As used in this section, unless the context clearly indicates otherwise, the term “international trade facility" shall mean a company that:
(1) Is doing business in the state and engaged in port-related activities including, but not limited to, warehousing, distribution, freight forwarding and handling, and goods processing;
(2) Has the sole discretion and authority to move cargo in containers or non-containerized, originating or terminating in the state;
(3) Uses water connected port facilities located in the state; and
(4) Uses barges and rail systems to move cargo, in containers or non-containerized, through port facilities in the state.
2. For taxable years beginning on or after January 1, 2014, but before January 1, 2020, a company that is an international trade facility shall be allowed a twenty-five dollar tax credit against the taxpayer's state tax liability per TEU or equivalent of noncontainerized cargo moved by barge or rail.
3. The department shall issue tax credits under this section, and in no case shall the department issue more than two million dollars in tax credits under this section in any fiscal year of the state. In addition, the department shall not issue tax credits under this section subsequent to the state's fiscal year ending on June 30, 2020. The international trade facility shall not be allowed to claim any tax credit under this section unless it has applied to the department for the tax credit and the department has approved the credit. The department shall determine the credit amount allowable for the year and provide a written certification to the international trade facility, which certification shall report the amount of the tax credit approved by the department. The international trade facility shall attach the certification to the applicable tax return.
4. For purposes of this section, the amount of any credit attributable to a partnership, S corporation, or limited liability company shall be allocated to the individual partners, shareholders, or members respectively in proportion to their ownership or interest in such business entities.
5. Any credit not usable for the taxable year may be carried over for the next five taxable years or until such credit is fully taken, whichever occurs first. The amount of the credit allowed under this section shall not exceed the tax imposed for such taxable year. No credit shall be carried back to a preceding taxable year. If a taxpayer that is subject to the tax limitation imposed under this subsection is allowed another credit under any other provision of law or has a credit carryover from a preceding taxable year, such taxpayer shall be considered to have first utilized any credit allowed that does not have a carryover provision and then any credit that is carried forward from a preceding taxable year before using any credit allowed under this section.
6. The department shall issue guidelines for the computation and carryover of the credits provided under this section and the establishment of criteria for international trade facilities.
7. The department shall promulgate rules to implement the provisions of this section. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly under chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2014, shall be invalid and void.
135.1666. 1. As used in this section, unless the context requires a different meaning, the following terms shall mean:
(1) "Affiliated companies", two or more companies related to each other so that:
(a) One company owns at least eighty percent of the voting power of the other or others; or
(b) The same interest owns at least eighty percent of the voting power of two or more companies.
(2) "Capital investment", the amount properly chargeable to a capital account for improvements to rehabilitate or expand depreciable real property placed in service during the taxable year and the cost of machinery, tools, and equipment used in an international trade facility directly related to the movement of cargo. “Capital investment” includes expenditures associated with any exterior, structural, mechanical, or electrical improvements necessary to expand or rehabilitate a building for commercial or industrial use and excavations, grading, paving, driveways, roads, sidewalks, landscaping, or other land improvements. For purposes of this section, machinery, tools, and equipment shall be deemed to include only that property placed in service by the international trade facility on or after January 1, 2013. Machinery, tools, and equipment excludes property:
(a) For which a credit under this section was previously granted;
(b) Placed in service by the taxpayer, a related party as defined in 267(b) of the Internal Revenue Code, as amended, or by a trade or business under common control as defined in 52(b) of the Internal Revenue Code, as amended; or
(c) Previously in service in the state that has a basis in the hands of the person acquiring it, determined in whole or in part by reference to the basis of such property in the hands of the person from whom acquired or 1014(a) of the Internal Revenue Code, as amended. "Capital investment" shall not include:
a. The cost of acquiring any real property or building;
b. The cost of furnishings;
c. Any expenditure associated with appraisal, architectural, engineering, or interior design fees;
d. Loan fees, points, or capitalized interest;
e. Legal, accounting, realtor, sales and marketing, or other professional fees;
f. Closing costs, permit fees, user fees, zoning fees, impact fees, and inspection fees;
g. Bids, insurance, signage, utilities, bonding, copying, rent loss, or temporary facilities costs incurred during construction;
h. Utility hook-up or access fees;
i. Outbuildings; or
j. The cost of any well or septic system.
(3) "Credit year", the first taxable year following the taxable year in which the international trade facility commenced or expanded its operations. A separate credit year and a three-year allowance shall exist for each distinct international trade facility of a single taxpayer.
(4) "International trade facility", a company that:
(a) Is engaged in port-related activities including, but not limited to, warehousing, distribution, freight forwarding and handling, and goods processing;
(b) Uses water connected port facilities located in the state; and
(c) Transports at least ten percent more cargo, measured in TEU marine containers or the non-containerized cargo equivalent, through water connected port facilities in the state during the taxable year than was transported by the company through such facilities during the preceding taxable year.
(5) "New, permanent full-time position", a job of indefinite duration, created by the company after establishing or expanding an international trade facility in the state, requiring a minimum of thirty-five hours of employment per week for each employee for the entire normal year of the company's operations, or a position of indefinite duration that requires a minimum of thirty-five hours of employment per week for each employee for the portion of the taxable year that the employee was initially hired for, or transferred to the international trade facility in the state. Seasonal or temporary positions, or a job created when a job function is shifted from an existing location in the state to the international trade facility, and positions in building and grounds maintenance, security, and other such positions that are ancillary to the principal activities performed by the employees at the international trade facility shall not qualify as new, permanent full-time positions.
(6) "Normal year", at least forty-eight weeks in a calendar year.
(7) "Qualified full-time employee", an employee filling a new, permanent full-time position in an international trade facility in the state.
(8) "Qualified trade activities", the completed exportation or importation of at least one International Organization for Standardization ocean container or the non-containerized equivalent with a minimum twenty foot length, through a Missouri port authority-operated cargo facility. An export container or the non-containerized cargo equivalent with an ultimate international destination must be loaded on a barge and an import container or the noncontainerized cargo equivalent originating from an international destination must be discharged from a barge at such facility.
2. For taxable years beginning on or after January 1, 2014, but before January 1, 2020, a taxpayer satisfying the requirements of this section shall be allowed to claim a tax credit against the taxpayer’s state tax liability in an amount equal to either (i) three thousand five hundred dollars per qualified full-time employee that results from increased qualified trade activities by the taxpayer or (ii) an amount equal to two percent of the capital investment made by the taxpayer to facilitate the increased qualified trade activities. The election of which tax credit amount to claim shall be the responsibility of the taxpayer. Both tax credits shall not be claimed for the same activities that occur within a calendar year. The portion of the three thousand five hundred dollars credit earned with respect to any qualified full-time employee who works in the state for less than twelve full months during the credit year shall be determined by multiplying the credit amount by a fraction, the numerator of which is the number of full months such employee worked for the international trade facility in the state during the credit year and the denominator of which is twelve.
3. The department shall issue tax credits under this section, and in no case shall the department issue more than five hundred thousand dollars in tax credits under this section in any fiscal year of the state. If the amount of tax credits requested under this section for any taxable year exceeds five hundred thousand dollars such credits shall be allocated proportionately among all qualified taxpayers. The department shall not issue tax credits under this section subsequent to the state's fiscal year ending on June 30, 2020. The taxpayer shall not be allowed to claim any tax credit under this section unless it has applied to the department for the tax credit and the department has approved the credit. The department shall determine the credit amount allowable for the taxable year and shall provide a written certification to the taxpayer, which certification shall report the amount of the tax credit approved by the department. The taxpayer shall attach the certification to the applicable income tax return.
4. The amount of the credit allowed under this section shall not exceed fifty percent of the tax imposed for the taxable year. Any remaining credit amount may be carried forward for the next ten taxable years. In the event a taxpayer who is subject to the limitation imposed under this subsection is allowed a different tax credit under another provision of law, or has a credit carry forward from a preceding taxable year, such taxpayer shall be considered to have first utilized any credit that does not have a carry forward provision and then any credit carried forward from a preceding taxable year, before using any of the credit allowed under this section.
5. No credit shall be earned for any employee:
(1) For whom a credit under this section was previously earned by a related party as defined in section 267(b) of the Internal Revenue Code, as amended, or a trade or business under common control as defined in section 52(b) of the Internal Revenue Code, as amended;
(2) Who was previously employed in the same job function in Missouri by a related party as defined in section 267(b) of the Internal Revenue Code, as amended, or a trade or business under common control as defined in section 52(b) of the Internal Revenue Code, as amended; or
(3) Whose job function was previously performed at a different location in Missouri by an employee of the taxpayer, by a related party as defined in section 267(b) of the Internal Revenue Code, as amended, or by a trade or business under common control as defined in section 52(b) of the Internal Revenue Code, as amended.
6. For purposes of this section, the amount of any credit attributable to a partnership, electing small business corporation (S corporation), or limited liability company shall be allocated to the individual partners, shareholders, or members respectively in proportion to their ownership or interest in such business entities.
7. For the purposes of this section, two or more affiliated companies may elect to aggregate the number of jobs created for qualified full-time employees or the amounts of capital investments as the result of the establishment or expansion by the individual companies in order to qualify for the credit allowed herein.
8. Recapture of the credit amount under the following circumstances shall be accomplished by increasing the tax in any of the five years succeeding the taxable year in which a credit has been earned pursuant to this section if the number of qualified full-time employees falls below the average number of qualified full-time employees during the taxable year. The tax increase amount shall be determined by recalculating the credit that would have been earned for the original taxable year using the decreased number of qualified full-time employees and subtracting the recalculated credit amount from the amount previously earned. In the event that the average number of qualified full-time employees employed at an international trade facility falls below the number employed by the taxpayer prior to claiming any credits under this section in any of the five taxable years succeeding the year in which the credits were earned, all credits earned with respect to the international trade facility shall be recaptured. No credit amount shall be recaptured more than once under this subsection. Any recapture under this subsection shall reduce credits earned but not yet allowed, and credits allowed but carried forward before the taxpayer's tax liability is increased.
9. The department shall issue guidelines for:
(1) The computation, carryover, and recapture of the credits provided under this section;
(2) The establishment of criteria for:
(a) International trade facilities;
(b) Qualified full-time employees at such facilities; and
(c) Capital investments; and
(3) The computation, carryover, recapture, and redemption of the credit by affiliated companies.
10. The department shall promulgate rules to implement the provisions of this section. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly under chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2014, shall be invalid and void.
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