Authorizes tax credits for certain contributions to local law enforcement foundations

SECOND REGULAR SESSION
HOUSE BILL NO. 2639
103RD GENERAL ASSEMBL Y
INTRODUCED BY REPRESENT A TIVE HINMAN.
6033H.01I JOSEPH ENGLER, Chief Clerk
AN ACT
T o amend chapter 135, RSMo, by adding thereto one new section relating to tax credits for
certain contributions to law enforcement foundations.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Chapter 135, RSMo, is amended by adding thereto one new section, to be
2 known as section 135.590, to read as follows:
135.590. 1. This section shall be known and may be cited as the "Law
2 Enfor cement Strategic Support Act" or the "LESS Crime Act".
3 2. As used in this section, the following terms mean:
4 (1) "Contribution", a donation of cash, stock, bonds, or other marketable
5 securities;
6 (2) "Department", the department of revenu e;
7 (3) "Law enfor cement foundation", any domestic nonpro fit corporation with the
8 sole function of supporting one local law enfor cement unit thr ough a formal relat ionship
9 r ecognized by such local law enforcem ent unit and that maintains nonprof it status
10 under Section 501(c)(3) of the Internal Revenue Code, as amended;
11 (4) "Local law enforcem ent unit", any agency office, or department of a county ,
12 municipality , or consolidated government of this state whose primary functions include
13 the enforcem ent of criminal or traffic laws, preservat ion of public order , protecti on of
14 life and pr operty , or the pr evention, detection, or investigation of crime. Such term
15 shall include any sheriff's office in this state. Such term shall not include any agency ,
16 office, or department conducting similar functions for any court, state board, state
17 authority , or other state law enforcem ent division or department;
EXPLANA TION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is
intended to be omitted from the law . Matter in bold-face type in the above bill is proposed language.
18 (5) "Qualified contribution", the pr eappr oved contribution of funds by a
19 taxpayer to a qualified law enforcem ent foundation under this section;
20 (6) "Qualified expenditur es", expenditures made by a qualified law enforcem ent
21 foundation:
22 (a) a. For salary supplements paid no mor e than twice annually or training
23 pr ovided dir ectly to law enforce ment officers employed by the local law enforcem ent
24 unit affiliated with such qualified law enfor cement foundation; or
25 b. For the pur chase, lease, maintenance, or impr ovement of equipment to be
26 used by such officers; or
27 (b) T o cover any costs incurr ed by the local law enforcem ent unit for the
28 operation of an emergency r esponse team that combines law enforcem ent officers and
29 behavioral health specialists, pr ovided that such costs shall not include salaries or other
30 r egular compensation;
31 (7) "Qualified law enfor cement foundation", any law enforce ment foundation
32 that has been designated as the sole local law enforce ment foundation for a single local
33 law enfor cement unit and has been certified and listed as provi ded under this section;
34 (8) "T ax cre dit", a cr edit against the tax otherwise due under chapter 143,
35 excluding withholding tax imposed under sections 143.191 to 143.265;
36 (9) "T axpayer", any individual, firm, partnership, partner in a firm or
37 partnership, corporation, shareho lder in an S corporation, or member of a limited
38 liability company subject to the state income tax imposed under chapter 143, excluding
39 the withholding tax imposed under sections 143.191 to 143.265.
40 3. For all tax years beginning on or after January 1, 2027, a taxpayer shall be
41 allowed to claim a tax cred it against the taxpayer's state tax liability for qualified
42 contributions made by the taxpayer as follows:
43 (1) In the case of a taxpayer with a filing status of single, the actual amount of
44 qualified contributions made or five thousand dollars per tax year , whichever is less;
45 (2) In the case of a taxpayer with a filing status of married filing combined, the
46 actual amount of qualified contributions made or ten thousand dollars per tax year ,
47 whichever is less;
48 (3) In the case of an individual taxpayer who is a member of a limited liability
49 company duly formed under state law , a shareho lder of an S corporation, or a partner
50 in a partnership, the actual amount of qualified contributions it made or ten thousand
51 dollars per tax year , whichever is less, provi ded, however that tax credits under this
52 subdivision shall only be allowed for the portion of the income on which such tax was
53 actually paid by such member , sharehol der , or partner; or
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54 (4) A corporation or other entity not subject to subdivisions (1) to (3) of this
55 subsection, the actual amount of qualified contributions made or seventy-five per cent of
56 such corporation's or other entity's income tax liability , whichever is less.
57 4. The cumulative amount of tax cr edits allowed to all taxpayers under this
58 section shall not exceed seventy-five million dollars per calendar year . If the amount of
59 tax cr edits claimed in a tax year under this section exceeds seventy-five million dollars,
60 tax cr edits shall be allowed based on the order in which they ar e claimed. Each
61 qualified law enfor cement foundation shall be limited to accepting thr ee million dollars
62 per calendar year of qualified contributions made under the prov isions of this section.
63 5. Nothing in this section shall be construed to limit the ability of a local law
64 enfor cement unit to r eceive gifts, grants, and other benefits fr om any sour ce allowed by
65 law , prov ided, however , that no local law enforce ment unit shall accept or r eceive mor e
66 than thr ee million dollars per calendar year in qualified contributions under this
67 section.
68 6. (1) No cr edit shall be allowed under this section to a taxpayer for any amount
69 of qualified contributions that wer e utilized as deductions or exemptions fr om taxable
70 income.
71 (2) In no event shall the total amount of a tax cr edit rede emed under this section
72 for a tax year exceed the taxpayer's income tax liability for such tax year . T ax cred its
73 issued under the pr ovisions of this section shall not be r efundable. Any unused tax
74 cr edit under this section may be carried forward to apply against the succeeding five tax
75 years' tax liability . No tax credit claimed under this section shall be allowed the
76 taxpayer against prior years' tax liability .
77 (3) No tax cr edit claimed under this section shall be assigned, transferred , sold,
78 or otherwise conveyed.
79 7. The department shall establish a page on the department's website for the
80 purpose of implementing this section. Such page shall contain, at a minimum:
81 (1) The application and requ irem ents to be certified as a qualified law
82 enfor cement foundation;
83 (2) The curr ent list of all qualified law enforcem ent foundations and their
84 affiliate law enfor cement units;
85 (3) The total amount of tax credi ts r emaining and available for pr eappr oval for
86 each year;
87 (4) A web-based method for taxpayers seeking the preap prov al status for
88 qualified contributions; and
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89 (5) The information recei ved by the department fr om each qualified law
90 enfor cement foundation under subdivision (1) of subsection 1 1 of this section except for
91 subparagraph d. of paragraph (b) of subdivision (1) of subsection 1 1 of this section.
92 8. Any valid law enforc ement foundation seeking appr oval as a qualified law
93 enfor cement foundation shall be certified by the department following the department's
94 r eceipt of a pr operly completed application and after the department has confirmed that
95 a single local law enforcem ent unit has validly designated the applicant as its sole law
96 enfor cement foundation. Such application shall be pr escribed by the department and
97 shall include an agreement by the applicant to fully comply with the terms and
98 conditions of this section.
99 9. (1) Prior to making a contribution to any qualified law enforcem ent
100 foundation, the taxpayer shall electr onically notify the department, in a manner
101 specified by the department, of the total amount of the contribution that such taxpayer
102 intends to make to such qualified law enfor cement foundation.
103 (2) Within thirty days of the date the request for pr eappr oval of a contribution
104 was receiv ed, the department shall pr eappr ove, deny , or prorate a r equested
1 0 5 contribution amount on a first-come, first-served basis and shall prov ide notice to
106 such taxpayer and the qualified law enforcem ent foundation of such preap prov al,
107 denial, or pr oration. Such notices shall not r equir e any signed rel ease or notarized
108 appr oval by the taxpayer . The pr eappr oval of contributions by the department shall be
109 based solely on the availability of tax cr edits subject to the limits established under this
110 section.
111 (3) Wi thin sixty days of the date the pr eappr oval notice was issued by the
112 department, the taxpayer shall contribute the pr eappr oved contribution amount to the
113 qualified law enfor cement foundation or such preap prov ed contribution amount shall
114 expir e. The department shall not include such expir ed amounts in determining the
115 r emaining amount of tax credi ts available under the aggr egate limit for the res pective
116 calendar year .
117 10. (1) Each qualified law enforcem ent foundation shall issue to each taxpayer
118 making a qualified contribution a letter of confirmation of the qualified contribution,
119 which shall include the taxpayer's name, addr ess, tax identification number , the amount
120 of the qualified contribution, the date of the qualified contribution, and the total amount
121 of the cred it allowed to the taxpayer .
122 (2) In order for a taxpayer to claim the tax cre dit allowed under this section, all
123 such applicable letters as pr ovided under this subsection shall be attached to the
124 taxpayer's income tax ret urn. When the taxpayer files an electr onic ret urn, such
125 confirmation shall only be req uired to be electr onically attached to the income tax
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126 r eturn if the Internal Revenue Service allows such attachments to be affixed and
127 transmitted to the department. In any such event, the taxpayer shall maintain such
128 confirmation and shall pr ovide such confirmation to the department upon requ est.
129 (3) The department shall allow tax cred its for any prea ppro ved qualified
130 contributions made to a local law enforcem ent foundation at the time the contributions
131 wer e made if such foundation was a qualified law enfor cement foundation at the time of
132 the department's pr eappr oval of the contributions and the taxpayer has otherwise
133 complied with this section.
134 1 1. (1) Each qualified law enforcem ent foundation shall annually submit to the
135 department:
136 (a) A complete copy of its Internal Revenue Service Form 990 and other
137 applicable attachments, or for any qualified law enforcem ent foundation that is not
138 r equir ed by federal law to file a Form 990, such foundation shall submit to the
139 department equivalent information on a form prescribed by the department; and
140 (b) A rep ort detailing the contributions received during the calendar year under
141 this section on a date determined by , and on a form provi ded by , the department which
142 shall include:
143 a. The total number and dollar value of individual contributions and tax cred its
144 appr oved. Individual contributions shall include contributions made by taxpayers filing
145 income tax r eturns as a single individual and taxpayers filing income tax r eturns as
146 married combined;
147 b. The total number and dollar value of corporate contributions and tax cred its
148 appr oved;
149 c. The total number and dollar value of all qualified expenditures made; and
150 d. A list of taxpayer contributors, including the dollar value of each contribution
151 and the dollar value of each appr oved tax cr edit.
152 (2) Notwithstanding any pro vision of section 105.1500 to the contrary , any
153 r equir ement to pr ovide information, documents, or rec ords under this section, and any
154 r equir ement established by the department to provi de information, documents, or
155 r ecords for the purpose of administering and enforcing this section, shall be exempt
156 fr om section 105.1500.
157 (3) Except for the information published in accordance with subsections 7 and
158 12 of this section, all information or r eports relat ive to this section that were provi ded by
159 qualified law enforcem ent foundations to the department shall be confidential taxpayer
160 information as pr ovided under section 32.057 and any other confidential pr ovision of
161 state tax law , whether such information rel ates to the taxpayer or the qualified law
162 enfor cement foundation.
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163 12. Each qualified law enforcem ent foundation shall publish on its website a
164 copy of its affiliated local law enfor cement unit's prior year's annual budget containing
165 the total amount of funds recei ved fro m its local governing body . If a qualified law
166 enfor cement foundation does not maintain a public website, such information shall be
167 otherwise made available by the qualified law enforcem ent foundation to the public
168 upon req uest.
169 13. (1) A taxpayer shall not be allowed to designate or dir ect the taxpayer's
170 qualified contributions to any particular purpose or for the dir ect benefit of any
171 particular individual.
172 (2) A taxpayer that operates, owns, is affiliated with, or is a subsidiary of an
173 association, organization, or other entity that contracts dir ectly with a qualified law
174 enfor cement foundation or the local law enforcem ent unit that is affiliated with a
175 qualified law enforcem ent foundation shall not be eligible for tax cre dits allowed under
176 this section for contributions made to such qualified law enfor cement foundation.
177 (3) In soliciting contributions, no person shall rep res ent or dir ect that, in
178 exchange for making qualified contributions to any qualified law enforc ement
17 9 foundation, a taxpayer shall r eceive any dir ect or particular benefit. The status as a
180 qualified law enforcem ent foundation shall be r evoked for any law enforce ment
181 foundation determined to be in violation of this subdivision and shall not be r enewed for
182 at least two years.
183 14. (1) Qualified contributions shall only be used for qualified expenditures .
184 Each qualified law enforcem ent foundation shall maintain accurate and curren t r ecords
185 of all expenditures of qualified contributions and pr ovide such r ecords to the
186 department upon r equest.
187 (2) A qualified law enforc ement foundation that fails to comply with any of the
188 r equir ements under this section shall be given written notice by the department of such
189 failur e to comply by certified mail and shall have ninety days fr om the date of the
190 r eceipt of such notice to corr ect all deficiencies.
191 (3) Upon failur e to corr ect all deficiencies within ninety days, the department
192 shall revok e the law enforcem ent foundation's status as a qualified law enforcem ent
193 foundation and such entity shall be immediately r emoved fr om the department's list of
194 qualified law enforcem ent foundations. All applications for pr eappr oval of tax cred its
195 for contributions to such law enfor cement foundation under this section made on or
196 after the date of such rem oval shall be rej ected.
197 (4) Each law enforcem ent foundation that has had its status revok ed and has
198 been rem oved fro m the department's list under this section shall immediately cease all
199 expenditur es of funds received rel ative to this section, and shall transfer all of such
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200 funds that are not yet expended to a prop erly operating qualified law enforcem ent
201 foundation within thirty calendar days of its rem oval fr om the department's list of
202 qualified law enforcem ent foundations.
203 15. The department of r evenue shall pro mulgate all necessary rules and
204 r egulations for the administration of this section including, but not limited to, rules
205 r elating to the verification of a taxpayer's qualified amount. Any rule or portion of a
206 rule, as that term is defined in section 536.010, that is crea ted under the authority
207 delegated in this section shall become effective only if it complies with and is subject to
208 all of the pr ovisions of chapter 536 and, if applicable, section 536.028. This section and
209 chapter 536 are nonseverable and if any of the powers vested with the general assembly
210 pursuant to chapter 536 to revi ew , to delay the effective date, or to disappr ove and annul
211 a rule are subsequently held unconstitutional, then the grant of rulemaking authority
212 and any rule prop osed or adopted after August 28, 2026, shall be invalid and void.
213 16. Under section 23.253 of the Missouri sunset act:
214 (1) The prov isions of the new pr ogram authorized under this section shall sunset
215 six years after the effective date of this section unless reauthori zed by an act of the
216 general assembly;
217 (2) This section shall terminate on September first of the calendar year
218 immediately following the calendar year in which the prog ram authorized under this
219 section is sunset; and
220 (3) Nothing in this subsection shall prev ent a taxpayer fr om claiming a tax credit
221 pr operly issued before this pr ogram was sunset in a tax year after the prog ram is sunset.
✔
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