135.535. Tax credit for relocating a business to a distressed community, approval by department of economic development, application--employees eligible to receive credit--credit for expenditures on e
Tax credit for relocating a business to a distressed community,approval by department of economic development,application--employees eligible to receive credit--credit forexpenditures on equipment--transfer of certificate ofcredit--maximum amount allowed, credit carriedover--limitations--tax credit for existing business in adistressed community which hires new employees, conditions andtypes of businesses eligible.
135.535. 1. A corporation, limited liability corporation,partnership or sole proprietorship, which moves its operations from outsideMissouri or outside a distressed community into a distressed community, orwhich commences operations in a distressed community on or after January 1,1999, and in either case has more than seventy-five percent of itsemployees at the facility in the distressed community, and which has fewerthan one hundred employees for whom payroll taxes are paid, and which is amanufacturing, biomedical, medical devices, scientific research, animalresearch, computer software design or development, computer programming,including Internet, web hosting, and other information technology, wirelessor wired or other telecommunications or a professional firm shall receive aforty percent credit against income taxes owed pursuant to chapter 143, 147or 148, RSMo, other than taxes withheld pursuant to sections 143.191 to143.265, RSMo, for each of the three years after such move, if approved bythe department of economic development, which shall issue a certificate ofeligibility if the department determines that the taxpayer is eligible forsuch credit. The maximum amount of credits per taxpayer set forth in thissubsection shall not exceed one hundred twenty-five thousand dollars foreach of the three years for which the credit is claimed. The department ofeconomic development, by means of rule or regulation promulgated pursuantto the provisions of chapter 536, RSMo, shall assign appropriate NorthAmerican Industry Classification System numbers to the companies which areeligible for the tax credits provided for in this section. Such three-yearcredits shall be awarded only one time to any company which moves itsoperations from outside of Missouri or outside of a distressed communityinto a distressed community or to a company which commences operationswithin a distressed community. A taxpayer shall file an application forcertification of the tax credits for the first year in which credits areclaimed and for each of the two succeeding taxable years for which creditsare claimed.
2. Employees of such facilities physically working and earning wagesfor that work within a distressed community whose employers have beenapproved for tax credits pursuant to subsection 1 of this section by thedepartment of economic development for whom payroll taxes are paid shallalso be eligible to receive a tax credit against individual income tax,imposed pursuant to chapter 143, RSMo, equal to one and one-half percent oftheir gross salary paid at such facility earned for each of the three yearsthat the facility receives the tax credit provided by this section, so longas they were qualified employees of such entity. The employer shallcalculate the amount of such credit and shall report the amount to theemployee and the department of revenue.
3. A tax credit against income taxes owed pursuant to chapter 143,147 or 148, RSMo, other than the taxes withheld pursuant to sections143.191 to 143.265, RSMo, in lieu of the credit against income taxes asprovided in subsection 1 of this section, may be taken by such an entity ina distressed community in an amount of forty percent of the amount of fundsexpended for computer equipment and its maintenance, medical laboratoriesand equipment, research laboratory equipment, manufacturing equipment,fiber optic equipment, high speed telecommunications, wiring or softwaredevelopment expense up to a maximum of seventy-five thousand dollars in taxcredits for such equipment or expense per year per entity and for each ofthree years after commencement in or moving operations into a distressedcommunity.
4. A corporation, partnership or sole partnership, which has no morethan one hundred employees for whom payroll taxes are paid, which isalready located in a distressed community and which expends funds for suchequipment pursuant to subsection 3 of this section in an amount exceedingits average of the prior two years for such equipment, shall be eligible toreceive a tax credit against income taxes owed pursuant to chapters 143,147 and 148, RSMo, in an amount equal to the lesser of seventy-fivethousand dollars or twenty-five percent of the funds expended for suchadditional equipment per such entity. Tax credits allowed pursuant to thissubsection or subsection 1 of this section may be carried back to any ofthe three prior tax years and carried forward to any of the five tax years.
5. An existing corporation, partnership or sole proprietorship thatis located within a distressed community and that relocates employees fromanother facility outside of the distressed community to its facility withinthe distressed community, and an existing business located within adistressed community that hires new employees for that facility may both beeligible for the tax credits allowed by subsections 1 and 3 of thissection. To be eligible for such tax credits, such a business, during oneof its tax years, shall employ within a distressed community at least twiceas many employees as were employed at the beginning of that tax year. Abusiness hiring employees shall have no more than one hundred employeesbefore the addition of the new employees. This subsection shall only applyto a business which is a manufacturing, biomedical, medical devices,scientific research, animal research, computer software design ordevelopment, computer programming or telecommunications business, or aprofessional firm.
6. Tax credits shall be approved for applicants meeting therequirements of this section in the order that such applications arereceived. Certificates of tax credits issued in accordance with thissection may be transferred, sold or assigned by notarized endorsement whichnames the transferee.
7. The tax credits allowed pursuant to subsections 1, 2, 3, 4 and 5of this section shall be for an amount of no more than ten million dollarsfor each year beginning in 1999. To the extent there are available taxcredits remaining under the ten million dollar cap provided in thissection, up to one hundred thousand dollars in the remaining credits shallfirst be used for tax credits authorized under section 135.562. The totalmaximum credit for all entities already located in distressed communitiesand claiming credits pursuant to subsection 4 of this section shall beseven hundred and fifty thousand dollars. The department of economicdevelopment in approving taxpayers for the credit as provided for insubsection 6 of this section shall use information provided by thedepartment of revenue regarding taxes paid in the previous year, orprojected taxes for those entities newly established in the state, as themethod of determining when this maximum will be reached and shall maintaina record of the order of approval. Any tax credit not used in the periodfor which the credit was approved may be carried over until the full credithas been allowed.
8. A Missouri employer relocating into a distressed community andhaving employees covered by a collective bargaining agreement at thefacility from which it is relocating shall not be eligible for the creditsin subsection 1, 3, 4 or 5 of this section, and its employees shall not beeligible for the credit in subsection 2 of this section if the relocationviolates or terminates a collective bargaining agreement covering employeesat the facility, unless the affected collective bargaining unit concurswith the move.
9. Notwithstanding any provision of law to the contrary, no taxpayershall earn the tax credits allowed in this section and the tax creditsotherwise allowed in section 135.110, or the tax credits, exemptions, andrefund otherwise allowed in sections 135.200, 135.220, 135.225 and 135.245,respectively, for the same business for the same tax period.
(L. 1998 H.B. 1656, A.L. 1999 H.B. 701 and S.B. 20, A.L. 2005 S.B. 343, A.L. 2007 H.B. 741)CROSS REFERENCE:
Tax Credit Accountability Act of 2004, additional requirements, RSMo 135.800 to 135.830