620.1881. Project notice of intent, department to respond with a proposal or a rejection--benefits available--effect on withholding tax--projects eligible for benefits--annual report--cap on tax credi
Project notice of intent, department to respond with a proposal or arejection--benefits available--effect on withholdingtax--projects eligible for benefits--annual report--cap on taxcredits--allocation of tax credits.
620.1881. 1. The department of economic development shall respondwithin thirty days to a company who provides a notice of intent with eitheran approval or a rejection of the notice of intent. The department shallgive preference to qualified companies and projects targeted at an area ofthe state which has recently been classified as a disaster area by thefederal government. Failure to respond on behalf of the department ofeconomic development shall result in the notice of intent being deemed anapproval for the purposes of this section. A qualified company who isprovided an approval for a project shall be allowed a benefit as providedin this program in the amount and duration provided in this section. Aqualified company may receive additional periods for subsequent new jobs atthe same facility after the full initial period if the minimum thresholdsare met as set forth in sections 620.1875 to 620.1890. There is no limiton the number of periods a qualified company may participate in theprogram, as long as the minimum thresholds are achieved and the qualifiedcompany provides the department with the required reporting and is inproper compliance for this program or other state programs. A qualifiedcompany may elect to file a notice of intent to start a new project periodconcurrent with an existing project period if the minimum thresholds areachieved and the qualified company provides the department with therequired reporting and is in proper compliance for this program and otherstate programs; however, the qualified company may not receive any furtherbenefit under the original approval for jobs created after the date of thenew notice of intent, and any jobs created before the new notice of intentmay not be included as new jobs for the purpose of benefit calculation inrelation to the new approval. When a qualified company has filed andreceived approval of a notice of intent and subsequently files anothernotice of intent, the department shall apply the definition of projectfacility under subdivision (19) of section 620.1878 to the new notice ofintent as well as all previously approved notices of intent and shalldetermine the application of the definitions of new job, new payroll,project facility base employment, and project facility base payrollaccordingly.
2. Notwithstanding any provision of law to the contrary, anyqualified company that is awarded benefits under this program may notsimultaneously receive tax credits or exemptions under sections 135.100 to135.150, sections 135.200 to 135.286, section 135.535, or sections 135.900to 135.906, RSMo, at the same project facility. The benefits available tothe company under any other state programs for which the company iseligible and which utilize withholding tax from the new jobs of the companymust first be credited to the other state program before the withholdingretention level applicable under the Missouri quality jobs act will beginto accrue. These other state programs include, but are not limited to, thenew jobs training program under sections 178.892 to 178.896, RSMo, the jobretention program under sections 178.760 to 178.764, RSMo, the realproperty tax increment allocation redevelopment act, sections 99.800 to99.865, RSMo, or the Missouri downtown and rural economic stimulus actunder sections 99.915 to 99.980, RSMo. If any qualified company alsoparticipates in the new jobs training program in sections 178.892 to178.896, RSMo, the company shall retain no withholding tax, but thedepartment shall issue a refundable tax credit for the full amount ofbenefit allowed under this subdivision. The calendar year annual maximumamount of tax credits which may be issued to a qualifying company that alsoparticipates in the new job training program shall be increased by anamount equivalent to the withholding tax retained by that company under thenew jobs training program. However, if the combined benefits of thequality jobs program and the new jobs training program exceed the projectedstate benefit of the project, as determined by the department of economicdevelopment through a cost-benefit analysis, the increase in the maximumtax credits shall be limited to the amount that would not cause thecombined benefits to exceed the projected state benefit. Any taxpayer whois awarded benefits under this program who knowingly hires individuals whoare not allowed to work legally in the United States shall immediatelyforfeit such benefits and shall repay the state an amount equal to anystate tax credits already redeemed and any withholding taxes alreadyretained.
3. The types of projects and the amount of benefits to be providedare:
(1) Small and expanding business projects: in exchange for theconsideration provided by the new tax revenues and other economic stimulithat will be generated by the new jobs created by the program, a qualifiedcompany may retain an amount equal to the withholding tax as calculatedunder subdivision (33) of section 620.1878 from the new jobs that wouldotherwise be withheld and remitted by the qualified company under theprovisions of sections 143.191 to 143.265, RSMo, for a period of threeyears from the date the required number of new jobs were created if theaverage wage of the new payroll equals or exceeds the county average wageor for a period of five years from the date the required number of new jobswere created if the average wage of the new payroll equals or exceeds onehundred twenty percent of the county average wage;
(2) Technology business projects: in exchange for the considerationprovided by the new tax revenues and other economic stimuli that will begenerated by the new jobs created by the program, a qualified company mayretain an amount equal to a maximum of five percent of new payroll for aperiod of five years from the date the required number of jobs were createdfrom the withholding tax of the new jobs that would otherwise be withheldand remitted by the qualified company under the provisions of sections143.191 to 143.265, RSMo, if the average wage of the new payroll equals orexceeds the county average wage. An additional one-half percent of newpayroll may be added to the five percent maximum if the average wage of thenew payroll in any year exceeds one hundred twenty percent of the countyaverage wage in the county in which the project facility is located, plusan additional one-half percent of new payroll may be added if the averagewage of the new payroll in any year exceeds one hundred forty percent ofthe average wage in the county in which the project facility is located.The department shall issue a refundable tax credit for any differencebetween the amount of benefit allowed under this subdivision and the amountof withholding tax retained by the company, in the event the withholdingtax is not sufficient to provide the entire amount of benefit due to thequalified company under this subdivision;
(3) High impact projects: in exchange for the consideration providedby the new tax revenues and other economic stimuli that will be generatedby the new jobs created by the program, a qualified company may retain anamount from the withholding tax of the new jobs that would otherwise bewithheld and remitted by the qualified company under the provisions ofsections 143.191 to 143.265, RSMo, equal to three percent of new payrollfor a period of five years from the date the required number of jobs werecreated if the average wage of the new payroll equals or exceeds the countyaverage wage of the county in which the project facility is located. Forhigh-impact projects in a facility located within two adjacent counties,the new payroll shall equal or exceed the higher county average wage of theadjacent counties. The percentage of payroll allowed under thissubdivision shall be three and one-half percent of new payroll if theaverage wage of the new payroll in any year exceeds one hundred twentypercent of the county average wage in the county in which the projectfacility is located. The percentage of payroll allowed under thissubdivision shall be four percent of new payroll if the average wage of thenew payroll in any year exceeds one hundred forty percent of the countyaverage wage in the county in which the project facility is located. Anadditional one percent of new payroll may be added to these percentages iflocal incentives equal between ten percent and twenty-four percent of thenew direct local revenue; an additional two percent of new payroll is addedto these percentages if the local incentives equal between twenty-fivepercent and forty-nine percent of the new direct local revenue; or anadditional three percent of payroll is added to these percentages if thelocal incentives equal fifty percent or more of the new direct localrevenue. The department shall issue a refundable tax credit for anydifference between the amount of benefit allowed under this subdivision andthe amount of withholding tax retained by the company, in the event thewithholding tax is not sufficient to provide the entire amount of benefitdue to the qualified company under this subdivision;
(4) Job retention projects: a qualified company may receive a taxcredit for the retention of jobs in this state, provided the qualifiedcompany and the project meets all of the following conditions:
(a) For each of the twenty-four months preceding the year in whichapplication for the program is made the qualified company must havemaintained at least one thousand full-time employees at the employer's sitein the state at which the jobs are based, and the average wage of suchemployees must meet or exceed the county average wage;
(b) The qualified company retained at the project facility the levelof full-time employees that existed in the taxable year immediatelypreceding the year in which application for the program is made;
(c) The qualified company is considered to have a significantstatewide effect on the economy, and has been determined to represent asubstantial risk of relocation from the state by the quality jobs advisorytask force established in section 620.1887; provided, however, until suchtime as the initial at-large members of the quality jobs advisory taskforce are appointed, this determination shall be made by the director ofthe department of economic development;
(d) The qualified company in the project facility will cause to beinvested a minimum of seventy million dollars in new investment prior tothe end of two years or will cause to be invested a minimum of thirtymillion dollars in new investment prior to the end of two years andmaintain an annual payroll of at least seventy million dollars during eachof the years for which a credit is claimed; and
(e) The local taxing entities shall provide local incentives of atleast fifty percent of the new direct local revenues created by the projectover a ten-year period. The quality jobs advisory task force may recommendto the department of economic development that appropriate penalties beapplied to the company for violating the agreement. The amount of the jobretention credit granted may be equal to up to fifty percent of the amountof withholding tax generated by the full-time jobs at the project facilityfor a period of five years. The calendar year annual maximum amount of taxcredit that may be issued to any qualified company for a job retentionproject or combination of job retention projects shall be seven hundredfifty thousand dollars per year, but the maximum amount may be increased upto one million dollars if such action is proposed by the department andapproved by the quality jobs advisory task force established in section620.1887; provided, however, until such time as the initial at-largemembers of the quality jobs advisory task force are appointed, thisdetermination shall be made by the director of the department of economicdevelopment. In considering such a request, the task force shall rely oneconomic modeling and other information supplied by the department whenrequesting the increased limit on behalf of the job retention project. Inno event shall the total amount of all tax credits issued for the entirejob retention program under this subdivision exceed three million dollarsannually. Notwithstanding the above, no tax credits shall be issued forjob retention projects approved by the department after August 30, 2013;
(5) Small business job retention and flood survivor relief: aqualified company may receive a tax credit under sections 620.1875 to620.1890 for the retention of jobs and flood survivor relief in this statefor each job retained over a three-year period, provided that:
(a) The qualified company did not receive any state or federalbenefits, incentives, or tax relief or abatement in locating its facilityin a flood plain;
(b) The qualified company and related companies have fewer than onehundred employees at the time application for the program is made;
(c) The average wage of the qualified company's and relatedcompanies' employees must meet or exceed the county average wage;
(d) All of the qualified company's and related companies' facilitiesare located in this state;
(e) The facilities at the primary business site in this state havebeen directly damaged by floodwater rising above the level of a fivehundred year flood at least two years, but fewer than eight years, prior tothe time application is made;
(f) The qualified company made significant efforts to protect thefacilities prior to any impending danger from rising floodwaters;
(g) For each year it receives tax credits under sections 620.1875 to620.1890, the qualified company and related companies retained, at thecompany's facilities in this state, at least the level of full-time,year-round employees that existed in the taxable year immediately precedingthe year in which application for the program is made; and
(h) In the years it receives tax credits under sections 620.1875 to620.1890, the company cumulatively invests at least two million dollars incapital improvements in facilities and equipment located at such facilitiesthat are not located within a five hundred year flood plain as designatedby the Federal Emergency Management Agency, and amended from time to time.The amount of the small business job retention and flood survivor reliefcredit granted may be equal to up to one hundred percent of the amount ofwithholding tax generated by the full-time jobs at the project facility fora period of three years. The calendar year annual maximum amount of taxcredit that may be issued to any qualified company for a small business jobretention and survivor relief project shall be two hundred fifty thousanddollars per year, but the maximum amount may be increased up to fivehundred thousand dollars if such action is proposed by the department andapproved by the quality jobs advisory task force established in section620.1887. In considering such a request, the task force shall rely oneconomic modeling and other information supplied by the department whenrequesting an increase in the limit on behalf of the small business jobretention and flood survivor relief project. In no event shall the totalamount of all tax credits issued for the entire small business jobretention and flood survivor relief program under this subdivision exceedfive hundred thousand dollars annually. Notwithstanding the provisions ofthis subdivision to the contrary, no tax credits shall be issued for smallbusiness job retention and flood survivor relief projects approved by thedepartment after August 30, 2010.
4. The qualified company shall provide an annual report of the numberof jobs and such other information as may be required by the department todocument the basis for the benefits of this program. The department maywithhold the approval of any benefits until it is satisfied that properdocumentation has been provided, and shall reduce the benefits to reflectany reduction in full-time employees or new payroll. Upon approval by thedepartment, the qualified company may begin the retention of thewithholding taxes when it reaches the minimum number of new jobs and theaverage wage exceeds the county average wage. Tax credits, if any, may beissued upon satisfaction by the department that the qualified company hasexceeded the county average wage and the minimum number of new jobs. Insuch annual report, if the average wage is below the county average wage,the qualified company has not maintained the employee insurance asrequired, or if the number of new jobs is below the minimum, the qualifiedcompany shall not receive tax credits or retain the withholding tax for thebalance of the benefit period. In the case of a qualified company thatinitially filed a notice of intent and received an approval from thedepartment for high- impact benefits and the minimum number of new jobs inan annual report is below the minimum for high-impact projects, the companyshall not receive tax credits for the balance of the benefit period but maycontinue to retain the withholding taxes if it otherwise meets therequirements of a small and expanding business under this program.
5. The maximum calendar year annual tax credits issued for the entireprogram shall not exceed eighty million dollars. Notwithstanding anyprovision of law to the contrary, the maximum annual tax credits authorizedunder section 135.535, RSMo, are hereby reduced from ten million dollars toeight million dollars, with the balance of two million dollars transferredto this program. There shall be no limit on the amount of withholdingtaxes that may be retained by approved companies under this program.
6. The department shall allocate the annual tax credits based on thedate of the approval, reserving such tax credits based on the department'sbest estimate of new jobs and new payroll of the project, and the otherfactors in the determination of benefits of this program. However, theannual issuance of tax credits is subject to the annual verification of theactual new payroll. The allocation of tax credits for the period assignedto a project shall expire if, within two years from the date ofcommencement of operations, or approval if applicable, the minimumthresholds have not been achieved. The qualified company may retainauthorized amounts from the withholding tax under this section once theminimum new jobs thresholds are met for the duration of the project period.No benefits shall be provided under this program until the qualifiedcompany meets the minimum new jobs thresholds. In the event the qualifiedcompany does not meet the minimum new job threshold, the qualified companymay submit a new notice of intent or the department may provide a newapproval for a new project of the qualified company at the project facilityor other facilities.
7. For a qualified company with flow-through tax treatment to itsmembers, partners, or shareholders, the tax credit shall be allowed tomembers, partners, or shareholders in proportion to their share ofownership on the last day of the qualified company's tax period.
8. Tax credits may be claimed against taxes otherwise imposed bychapters 143 and 148, RSMo, and may not be carried forward but shall beclaimed within one year of the close of the taxable year for which theywere issued, except as provided under subdivision (4) of subsection 3 ofthis section.
9. Tax credits authorized by this section may be transferred, sold,or assigned by filing a notarized endorsement thereof with the departmentthat names the transferee, the amount of tax credit transferred, and thevalue received for the credit, as well as any other information reasonablyrequested by the department.
10. Prior to the issuance of tax credits, the department shall verifythrough the department of revenue, or any other state department, that thetax credit applicant does not owe any delinquent income, sales, or use taxor interest or penalties on such taxes, or any delinquent fees orassessments levied by any state department and through the department ofinsurance, financial institutions and professional registration that theapplicant does not owe any delinquent insurance taxes. Such delinquencyshall not affect the authorization of the application for such tax credits,except that at issuance credits shall be first applied to the delinquencyand any amount issued shall be reduced by the applicant's tax delinquency.If the department of revenue or the department of insurance, financialinstitutions and professional registration, or any other state department,concludes that a taxpayer is delinquent after June fifteenth but beforeJuly first of any year and the application of tax credits to suchdelinquency causes a tax deficiency on behalf of the taxpayer to arise,then the taxpayer shall be granted thirty days to satisfy the deficiency inwhich interest, penalties, and additions to tax shall be tolled. Afterapplying all available credits toward a tax delinquency, the administeringagency shall notify the appropriate department and that department shallupdate the amount of outstanding delinquent tax owed by the applicant. Ifany credits remain after satisfying all insurance, income, sales, and usetax delinquencies, the remaining credits shall be issued to the applicant,subject to the restrictions of other provisions of law.
11. Except as provided under subdivision (4) of subsection 3 of thissection, the director of revenue shall issue a refund to the qualifiedcompany to the extent that the amount of credits allowed in this sectionexceeds the amount of the qualified company's income tax.
12. An employee of a qualified company will receive full credit forthe amount of tax withheld as provided in section 143.211, RSMo.
13. If any provision of sections 620.1875 to 620.1890 or applicationthereof to any person or circumstance is held invalid, the invalidity shallnot affect other provisions or application of these sections which can begiven effect without the invalid provisions or application, and to thisend, the provisions of sections 620.1875 to 620.1890 are hereby declaredseverable.
(L. 2005 S.B. 343, A.L. 2007 1st Ex. Sess. H.B. 1, A.L. 2008 H.B. 2058 merged with S.B. 718, A.L. 2009 H.B. 191)Effective 6-04-09