Missouri Revised Statutes
Chapter 135
Tax Relief
←135.679
Section 135.680.1
135.682→
August 28, 2015
Definitions--tax credit, amount--recapture, when--rulemaking authority--reauthorization procedure--sunset provision.
135.680. 1. As used in this section, the following terms shall mean:
(1) "Adjusted purchase price", the product of:
(a) The amount paid to the issuer of a qualified equity investment for
such qualified equity investment; and
(b) The following fraction:
a. The numerator shall be the dollar amount of qualified low-income
community investments held by the issuer in this state as of the credit
allowance date during the applicable tax year; and
b. The denominator shall be the total dollar amount of qualified
low-income community investments held by the issuer in all states as of the
credit allowance date during the applicable tax year;
c. For purposes of calculating the amount of qualified low-income
community investments held by an issuer, an investment shall be considered
held by an issuer even if the investment has been sold or repaid; provided
that the issuer reinvests an amount equal to the capital returned to or
recovered by the issuer from the original investment, exclusive of any
profits realized, in another qualified low-income community investment
within twelve months of the receipt of such capital. An issuer shall not be
required to reinvest capital returned from qualified low-income community
investments after the sixth anniversary of the issuance of the qualified
equity investment, the proceeds of which were used to make the qualified
low-income community investment, and the qualified low-income community
investment shall be considered held by the issuer through the seventh
anniversary of the qualified equity investment's issuance;
(2) "Applicable percentage", zero percent for each of the first two
credit allowance dates, seven percent for the third credit allowance date,
and eight percent for the next four credit allowance dates;
(3) "Credit allowance date", with respect to any qualified equity
investment:
(a) The date on which such investment is initially made; and
(b) Each of the six anniversary dates of such date thereafter;
(4) "Long-term debt security", any debt instrument issued by a qualified
community development entity, at par value or a premium, with an original
maturity date of at least seven years from the date of its issuance, with no
acceleration of repayment, amortization, or prepayment features prior to its
original maturity date, and with no distribution, payment, or interest
features related to the profitability of the qualified community development
entity or the performance of the qualified community development entity's
investment portfolio. The foregoing shall in no way limit the holder's
ability to accelerate payments on the debt instrument in situations where the
issuer has defaulted on covenants designed to ensure compliance with this
section or Section 45D of the Internal Revenue Code of 1986, as amended;
(5) "Qualified active low-income community business", the meaning given
such term in Section 45D of the Internal Revenue Code of 1986, as amended;
provided that any business that derives or projects to derive fifteen percent
or more of its annual revenue from the rental or sale of real estate shall
not be considered to be a qualified active low-income community business;
(6) "Qualified community development entity", the meaning given such
term in Section 45D of the Internal Revenue Code of 1986, as amended;
provided that such entity has entered into an allocation agreement with the
Community Development Financial Institutions Fund of the U.S. Treasury
Department with respect to credits authorized by Section 45D of the Internal
Revenue Code of 1986, as amended, which includes the state of Missouri within
the service area set forth in such allocation agreement;
(7) "Qualified equity investment", any equity investment in, or
long-term debt security issued by, a qualified community development entity
that:
(a) Is acquired after September 4, 2007, at its original issuance solely
in exchange for cash;
(b) Has at least eighty-five percent of its cash purchase price used by
the issuer to make qualified low-income community investments; and
(c) Is designated by the issuer as a qualified equity investment under
this subdivision and is certified by the department of economic development
as not exceeding the limitation contained in subsection 2 of this section.
This term shall include any qualified equity investment that does not meet the
provisions of paragraph (a) of this subdivision if such investment was a
qualified equity investment in the hands of a prior holder;
(8) "Qualified low-income community investment", any capital or equity
investment in, or loan to, any qualified active low-income community
business. With respect to any one qualified active low-income community
business, the maximum amount of qualified low-income community investments
made in such business, on a collective basis with all of its affiliates, that
may be used from the calculation of any numerator described in subparagraph
a. of paragraph (b) of subdivision (1) of this subsection shall be ten million
dollars whether issued to one or several qualified community development
entities;
(9) "Tax credit", a credit against the tax otherwise due under chapter
143, excluding withholding tax imposed in sections 143.191 to 143.265, or
otherwise due under section 375.916 or chapter 147, 148, or 153;
(10) "Taxpayer", any individual or entity subject to the tax imposed in
chapter 143, excluding withholding tax imposed in sections 143.191 to
143.265, or the tax imposed in section 375.916 or chapter 147, 148, or 153.
2. A taxpayer that makes a qualified equity investment earns a vested
right to tax credits under this section. On each credit allowance date of
such qualified equity investment the taxpayer, or subsequent holder of the
qualified equity investment, shall be entitled to a tax credit during the
taxable year including such credit allowance date. The tax credit amount
shall be equal to the applicable percentage of the adjusted purchase price
paid to the issuer of such qualified equity investment. The amount of the
tax credit claimed shall not exceed the amount of the taxpayer's state tax
liability for the tax year for which the tax credit is claimed. No tax
credit claimed under this section shall be refundable or transferable. Tax
credits earned by a partnership, limited liability company, S-corporation, or
other pass-through entity may be allocated to the partners, members, or
shareholders of such entity for their direct use in accordance with the
provisions of any agreement among such partners, members, or shareholders.
Any amount of tax credit that the taxpayer is prohibited by this section from
claiming in a taxable year may be carried forward to any of the taxpayer's
five subsequent taxable years. The department of economic development shall
limit the monetary amount of qualified equity investments permitted under
this section to a level necessary to limit tax credit utilization at no more
than twenty-five million dollars of tax credits in any fiscal year. Such
limitation on qualified equity investments shall be based on the anticipated
utilization of credits without regard to the potential for taxpayers to carry
forward tax credits to later tax years.
3. The issuer of the qualified equity investment shall certify to the
department of economic development the anticipated dollar amount of such
investments to be made in this state during the first twelve-month period
following the initial credit allowance date. If on the second credit
allowance date, the actual dollar amount of such investments is different
than the amount estimated, the department of economic development shall
adjust the credits arising on the second allowance date to account for such
difference.
4. The department of economic development shall recapture the tax credit
allowed under this section with respect to such qualified equity investment
under this section if:
(1) Any amount of the federal tax credit available with respect to a
qualified equity investment that is eligible for a tax credit under this
section is recaptured under Section 45D of the Internal Revenue Code of 1986,
as amended; or
(2) The issuer redeems or makes principal repayment with respect to a
qualified equity investment prior to the seventh anniversary of the issuance
of such qualified equity investment. Any tax credit that is subject to
recapture shall be recaptured from the taxpayer that claimed the tax credit on
a return.
5. The department of economic development shall promulgate rules to
implement the provisions of this section, including recapture provisions on a
scaled proportional basis, and to administer the allocation of tax credits
issued for qualified equity investments, which shall be conducted on a
first-come, first-serve basis. 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 pursuant to 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 September 4, 2007, shall be invalid and void.
6. For fiscal years following fiscal year 2010, qualified equity
investments shall not be made under this section unless reauthorization is
made pursuant to this subsection. For all fiscal years following fiscal year
2010, unless the general assembly adopts a concurrent resolution granting
authority to the department of economic development to approve qualified
equity investments for the Missouri new markets development program and
clearly describing the amount of tax credits available for the next fiscal
year, or otherwise complies with the provisions of this subsection, no
qualified equity investments may be permitted to be made under this section.
The amount of available tax credits contained in such a resolution shall not
exceed the limitation provided under subsection 2 of this section. In any
year in which the provisions of this section shall sunset pursuant to
subsection 7 of this section, reauthorization shall be made by general law and
not by concurrent resolution. Nothing in this subsection shall preclude a
taxpayer who makes a qualified equity investment prior to the expiration of
authority to make qualified equity investments from claiming tax credits
relating to such qualified equity investment for each applicable credit
allowance date.
7. Under section 23.253 of the Missouri sunset act:
(1) The provisions of the new program authorized under this section
shall automatically sunset six years after September 4, 2007, unless
reauthorized by an act of the general assembly; and
(2) If such program is reauthorized, the program authorized under this
section shall automatically sunset twelve years after the effective date of
the reauthorization of this section; and
(3) This section shall terminate on September first of the calendar year
immediately following the calendar year in which the program authorized under
this section is sunset. However, nothing in this subsection shall preclude a
taxpayer who makes a qualified equity investment prior to sunset of this
section under the provisions of section 23.253 from claiming tax credits
relating to such qualified equity investment for each credit allowance date.
(L. 2007 1st Ex. Sess H.B. 1, A.L. 2009 H.B. 191)
Effective 6-04-09
Sunset date 9-04-13
Termination date 9-01-14
2007
2007
135.680. 1. As used in this section, the following terms shall mean:
(1) "Adjusted purchase price", the product of:
(a) The amount paid to the issuer of a qualified equity investment
for such qualified equity investment; and
(b) The following fraction:
a. The numerator shall be the dollar amount of qualified low-income
community investments held by the issuer in this state as of the credit
allowance date during the applicable tax year; and
b. The denominator shall be the total dollar amount of qualified
low-income community investments held by the issuer in all states as of the
credit allowance date during the applicable tax year;
c. For purposes of calculating the amount of qualified low-income
community investments held by an issuer, an investment shall be considered
held by an issuer even if the investment has been sold or repaid; provided
that the issuer reinvests an amount equal to the capital returned to or
recovered by the issuer from the original investment, exclusive of any
profits realized, in another qualified low-income community investment
within twelve months of the receipt of such capital. An issuer shall not
be required to reinvest capital returned from qualified low-income
community investments after the sixth anniversary of the issuance of the
qualified equity investment, the proceeds of which were used to make the
qualified low-income community investment, and the qualified low-income
community investment shall be considered held by the issuer through the
seventh anniversary of the qualified equity investment's issuance;
(2) "Applicable percentage", zero percent for each of the first two
credit allowance dates, seven percent for the third credit allowance date,
and eight percent for the next four credit allowance dates;
(3) "Credit allowance date", with respect to any qualified equity
investment:
(a) The date on which such investment is initially made; and
(b) Each of the six anniversary dates of such date thereafter;
(4) "Long-term debt security", any debt instrument issued by a
qualified community development entity, at par value or a premium, with an
original maturity date of at least seven years from the date of its
issuance, with no acceleration of repayment, amortization, or prepayment
features prior to its original maturity date, and with no distribution,
payment, or interest features related to the profitability of the qualified
community development entity or the performance of the qualified community
development entity's investment portfolio. The foregoing shall in no way
limit the holder's ability to accelerate payments on the debt instrument in
situations where the issuer has defaulted on covenants designed to ensure
compliance with this section or Section 45D of the Internal Revenue Code of
1986, as amended;
(5) "Qualified active low-income community business", the meaning
given such term in Section 45D of the Internal Revenue Code of 1986, as
amended; provided that any business that derives or projects to derive
fifteen percent or more of its annual revenue from the rental or sale of
real estate shall not be considered to be a qualified active low-income
community business;
(6) "Qualified community development entity", the meaning given such
term in Section 45D of the Internal Revenue Code of 1986, as amended;
provided that such entity has entered into an allocation agreement with the
Community Development Financial Institutions Fund of the U.S. Treasury
Department with respect to credits authorized by Section 45D of the
Internal Revenue Code of 1986, as amended, which includes the state of
Missouri within the service area set forth in such allocation agreement;
(7) "Qualified equity investment", any equity investment in, or
long-term debt security issued by, a qualified community development entity
that:
(a) Is acquired after September 4, 2007, at its original issuance
solely in exchange for cash;
(b) Has at least eighty-five percent of its cash purchase price used
by the issuer to make qualified low-income community investments; and
(c) Is designated by the issuer as a qualified equity investment
under this subdivision and is certified by the department of economic
development as not exceeding the limitation contained in subsection 2 of
this section.
This term shall include any qualified equity investment that does not meet
the provisions of paragraph (a) of this subdivision if such investment was
a qualified equity investment in the hands of a prior holder;
(8) "Qualified low-income community investment", any capital or
equity investment in, or loan to, any qualified active low-income community
business. With respect to any one qualified active low-income community
business, the maximum amount of qualified low-income community investments
made in such business, on a collective basis with all of its affiliates,
that may be used from the calculation of any numerator described in
subparagraph a. of paragraph (b) of subdivision (1) of this subsection
shall be ten million dollars whether issued to one or several qualified
community development entities;
(9) "Tax credit", a credit against the tax otherwise due under
chapter 143, RSMo, excluding withholding tax imposed in sections 143.191 to
143.265, RSMo, or otherwise due under section 375.916, RSMo, or chapter
147, 148, or 153, RSMo;
(10) "Taxpayer", any individual or entity subject to the tax imposed
in chapter 143, RSMo, excluding withholding tax imposed in sections 143.191
to 143.265, RSMo, or the tax imposed in section 375.916, RSMo, or chapter
147, 148, or 153, RSMo.
2. A taxpayer that makes a qualified equity investment earns a vested
right to tax credits under this section. On each credit allowance date of
such qualified equity investment the taxpayer, or subsequent holder of the
qualified equity investment, shall be entitled to a tax credit during the
taxable year including such credit allowance date. The tax credit amount
shall be equal to the applicable percentage of the adjusted purchase price
paid to the issuer of such qualified equity investment. The amount of the
tax credit claimed shall not exceed the amount of the taxpayer's state tax
liability for the tax year for which the tax credit is claimed. No tax
credit claimed under this section shall be refundable or transferable. Tax
credits earned by a partnership, limited liability company, S-corporation,
or other pass-through entity may be allocated to the partners, members, or
shareholders of such entity for their direct use in accordance with the
provisions of any agreement among such partners, members, or shareholders.
Any amount of tax credit that the taxpayer is prohibited by this section
from claiming in a taxable year may be carried forward to any of the
taxpayer's five subsequent taxable years. The department of economic
development shall limit the monetary amount of qualified equity investments
permitted under this section to a level necessary to limit tax credit
utilization at no more than fifteen million dollars of tax credits in any
fiscal year. Such limitation on qualified equity investments shall be
based on the anticipated utilization of credits without regard to the
potential for taxpayers to carry forward tax credits to later tax years.
3. The issuer of the qualified equity investment shall certify to the
department of economic development the anticipated dollar amount of such
investments to be made in this state during the first twelve-month period
following the initial credit allowance date. If on the second credit
allowance date, the actual dollar amount of such investments is different
than the amount estimated, the department of economic development shall
adjust the credits arising on the second allowance date to account for such
difference.
4. The department of economic development shall recapture the tax
credit allowed under this section with respect to such qualified equity
investment under this section if:
(1) Any amount of the federal tax credit available with respect to a
qualified equity investment that is eligible for a tax credit under this
section is recaptured under Section 45D of the Internal Revenue Code of
1986, as amended; or
(2) The issuer redeems or makes principal repayment with respect to a
qualified equity investment prior to the seventh anniversary of the
issuance of such qualified equity investment.
Any tax credit that is subject to recapture shall be recaptured from the
taxpayer that claimed the tax credit on a return.
5. The department of economic development shall promulgate rules to
implement the provisions of this section, including recapture provisions on
a scaled proportional basis, and to administer the allocation of tax
credits issued for qualified equity investments, which shall be conducted
on a first-come, first-serve basis. Any rule or portion of a rule, as that
term is defined in section 536.010, RSMo, 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, RSMo,
and, if applicable, section 536.028, RSMo. This section and chapter 536,
RSMo, are nonseverable and if any of the powers vested with the general
assembly pursuant to chapter 536, RSMo, 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 September 4, 2007, shall be invalid and void.
6. For fiscal years following fiscal year 2010, qualified equity
investments shall not be made under this section unless reauthorization is
made pursuant to this subsection. For all fiscal years following fiscal
year 2010, unless the general assembly adopts a concurrent resolution
granting authority to the department of economic development to approve
qualified equity investments for the Missouri new markets development
program and clearly describing the amount of tax credits available for the
next fiscal year, or otherwise complies with the provisions of this
subsection, no qualified equity investments may be permitted to be made
under this section. The amount of available tax credits contained in such
a resolution shall not exceed the limitation provided under subsection 2 of
this section. In any year in which the provisions of this section shall
sunset pursuant to subsection 7 of this section, reauthorization shall be
made by general law and not by concurrent resolution. Nothing in this
subsection shall preclude a taxpayer who makes a qualified equity
investment prior to the expiration of authority to make qualified equity
investments from claiming tax credits relating to such qualified equity
investment for each applicable credit allowance date.
7. Under section 23.253, RSMo, of the Missouri sunset act:
(1) The provisions of the new program authorized under this section
shall automatically sunset six years after September 4, 2007, unless
reauthorized by an act of the general assembly; and
(2) If such program is reauthorized, the program authorized under
this section shall automatically sunset twelve years after the effective
date of the reauthorization of this section; and
(3) This section shall terminate on September first of the calendar
year immediately following the calendar year in which the program
authorized under this section is sunset.
However, nothing in this subsection shall preclude a taxpayer who makes a
qualified equity investment prior to sunset of this section under the
provisions of section 23.253, RSMo, from claiming tax credits relating to
such qualified equity investment for each credit allowance date.
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