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SECOND REGULAR SESSION
HOUSE BILL NO. 3503
103RD GENERAL ASSEMBL Y
INTRODUCED BY REPRESENT A TIVE THOMAS.
6908H.01I JOSEPH ENGLER, Chief Clerk
AN ACT
T o repeal section 144.014, RSMo, and to enact in lieu thereof seven new sections relating to
taxation, with penalty provisions.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Section 144.014, RSMo, is repealed and seven new sections enacted in
2 lieu thereof, to be known as sections 143.3000, 143.3003, 143.3006, 143.3009, 143.3012,
3 143.3015, and 144.014, to read as follows:
143.3000. 1. Sections 143.3000 to 143.3015 shall be known and may be cited as
2 the "Business Enterprise T ax Act".
3 2. As used in sections 143.3000 to 143.3015, the following terms mean:
4 (1) "Accumulated r evenues and profit s":
5 (a) In the case of a corporation other than an S corporation, the amount
6 determined to be earnings and profit s for federal income tax purposes; or
7 (b) In the case of all other business enterprises, including S corporations, the
8 total undistributed revenu es of the enterprise fr om whatever source derived, except that
9 the distribution of capital, whether in liquidation or otherwise, shall not be included in
10 the enterprise value tax base;
11 (2) "Affiliated gr oup", the same meaning as such term is defined under 26
12 U.S.C. Section 1504(a) of the Internal Revenue Code, except that "affiliated gr oup"
13 shall not include:
14 (a) An insurance company subject to taxation under 26 U.S.C. Section 801 of the
15 Internal Revenue Code;
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.
16 (b) Regulated investment companies or rea l estate investment trusts subject to
17 tax under 26 U.S.C. Sections 851 to 860 of the Internal Revenue Code; or
18 (c) An includible insurance company as defined under 26 U.S.C. Section 1504(c)
19 of the Internal Revenue Code;
20 (3) "Business activity", a transfer of legal or equitable title to or rent al of
21 pr operty , whether real , personal, or mixed, tangible or intangible, or the performance of
22 services, or a combination ther eof, made or engaged in, or caused to be made or engaged
23 in, whether in intrastate, interstate, or for eign commer ce, with the object of gain,
24 benefit, net earnings, reven ue, or advantage, whether dir ect or indirect , to the business
25 enterprise or to others. Although an activity of an enterprise may be incidental to
26 another of its business activities, each activity is consider ed to be business engaged in or
27 carried on within the meaning of sections 143.3000 to 143.3015. The term "business
28 activity" shall not include services ren dered by an employee to an employer or services
29 as a dir ector of a corporation or the holding of an ownership interes t in a qualified
30 investment company if no other business activity is engaged outside of the holding of the
31 ownership interes t;
32 (4) "Business enterprise", any for -pr ofit or nonprof it enterprise or organization,
33 whether corporation, partnership, limited liability company , pr oprietorship,
3 4 association, trust, foundation, business trust, rea l estate trust, or other form of
35 organization engaged in or carrying on any business activity within this state, except
36 those enterprises as are express ly made exempt fr om taxation of net earnings under 26
37 U.S.C. Section 501(c)(3) of the Internal Revenue Code to the extent the enterprise does
38 not engage in any business activity constituting unr elated business activity as defined
39 under 26 U.S.C. Section 513 of the Internal Revenue Code. Each business enterprise is
40 subject to the tax imposed under sections 143.3000 to 143.3015 as a separate entity
41 except that trusts and foundations tr eated as grantor trusts under 26 U.S.C. Section 671
42 of the Internal Revenue Code shall be included in the retu rn of their owners, and the
43 owners are subject to the tax on the trust or foundation to the extent the owners would
44 be considered a business enterprise under sections 143.3000 to 143.3015,
4 5 notwithstanding the existence of the trust or foundation. The use of consolidated
46 r eturns as defined in the Internal Revenue Code or of combined r eporting is not
47 permitted. The term "business enterprise" shall not include a qualified investment
48 company;
49 (5) "Compensation", includes:
50 (a) All wages, salaries, fees, bonuses, commissions, or other payments paid
51 dir ectly or accrued by the business enterprise in the taxable period on behalf of or for
52 the benefit of employees, officers, or dir ectors of the business enterprise and subject to
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53 or specifically exempt fr om withholding under 26 U.S.C. Section 3401 of the Internal
54 Revenue Code except for payments that are made expre ssly exempt fr om withholding
55 under 26 U.S.C. Section 3401(a)(1), (9), (10), (13), (14), (15), (16), (18), (19), or (20); and
56 tips requi red to be repor ted by the employee to the employer under 26 U.S.C. Section
57 6053(a) of the Internal Revenue Code;
58 (b) The amount of any deduction taken under section 143.3003 in the taxable
59 period; and
60 (c) Net earnings fr om self-employment subject to tax under 26 U.S.C. Section
61 1401 of the Internal Revenue Code to the extent not included in the amount of any
62 deduction taken under section 143.3003 in the taxable period;
63 (6) "Department", the department of revenu e;
64 (7) "Dividends", any distribution of money or pr operty , other than the
65 distribution of newly issued stock of the same enterprise, to the owners of a business
66 enterprise with r espect to their ownership intere st in the enterprise from the
67 accumulated rev enues and pr ofits of the enterprise. The term "dividends" shall not
68 include:
69 (a) Distributions of money or prop erty to beneficiaries of a trust qualified under
70 26 U.S.C. Section 401 of the Internal Revenue Code;
71 (b) Cash or noncash payments of life, sickness, accident, or other benefits to
72 members or their dependents or designated beneficiaries fr om a voluntary employee's
73 beneficiary association qualified under 26 U.S.C. Section 501(c)(9) of the Internal
74 Revenue Code;
75 (c) Distributions of money or pro perty to participants fr om any common trust
76 fund as defined under 26 U.S.C. Section 584 of the Internal Revenue Code;
77 (d) Policyholder dividends as defined under 26 U.S.C. Section 808 of the Internal
78 Revenue Code, to the extent such dividends are not r educed under 26 U.S.C. Section 809
79 of the Internal Revenue Code;
80 (e) Payment of interes t on deposits of depositors of a mutual bank or credi t
81 union; or
82 (f) Distributions of money or prop erty to or on behalf of beneficiaries of a trust
83 that is either subject to taxation under 26 U.S.C. Section 641 or described in 26 U.S.C.
84 Section 664 of the Internal Revenue Code; pro vided, that this paragraph applies only to
85 the extent that the trust limits its activities to personal investment activities that do not
86 constitute business activities, and those incidental to or in support of personal
87 investment activities;
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88 (8) "Employee", an employee as defined under 26 U.S.C. Section 3401(c) of the
89 Internal Revenue Code and includes any person fr om whom an employer is req uired to
90 withhold compensation for federal income tax purposes;
91 (9) "Employer", an employer as defined under 26 U.S.C. Section 3401(d) of the
92 Internal Revenue Code, and includes any person requ ired to withhold compensation for
93 federal income tax purposes;
94 (10) "Enterprise value tax base", the sum of all compensation paid or accrued,
95 inter est paid or accrued, and dividends paid by the business enterprise, before special
96 adjustments pro vided under section 143.3003 or apportionment as provi ded under
97 section 143.3006;
98 (1 1) "Gr oss business rec eipts", all earnings for federal income tax purposes fr om
99 whatever source derived in the conduct of business activity; pr ovided, that, in the case of
100 nonpr ofit enterprises not requ ired to pay income taxes, "gr oss business receip ts" means
101 the sum of all revenu es derived in the conduct of business activity . The term "gr oss
102 business recei pts":
103 (a) Includes, but is not limited to, gr oss pr oceeds from sales; compensation for
104 r endering services; gross pro ceeds real ized fr om trading in stocks, bonds, or other
105 evidences of indebtedness; gr oss pr oceeds realize d fro m sale of assets used in trade or
106 business; interes t, discount, gr oss r ents, r oyalties, fees, commissions, and dividends,
107 without any deduction on account of the cost of pr operty sold; and the cost of materials
108 used, labor costs, inter est, discount, delivery costs, taxes, or any other expense paid or
109 accrued and without any deduction on account of losses; but
110 (b) Shall not include any rece ipts that would otherwise be consider ed "gr oss
111 business r eceipts" recei ved by an enterprise that constitutes a qualified trust under 26
112 U.S.C. 401, or is defined in 26 U.S.C. Section 501(c)(9) or 584, of the Internal Revenue
113 Code;
114 (12) "Interes t", all amounts paid or accrued for the use or forbearance of money
115 or pr operty; and shall not include amounts paid, cre dited, or set aside in connection
116 with res erves by insur ers to fulfill policy and contractual res ponsibilities to policy
117 holders or by voluntary employees' beneficiary associations qualified under 26 U.S.C.
118 Section 501(c)(9) of the Internal Revenue Code to fulfill obligations to members;
119 (13) "Internal Revenue Code", the federal Internal Revenue Code of 1986, as
120 amended;
121 (14) "Qualified investment company":
122 (a) A r egulated investment company as defined in 26 U.S.C. Section 851 of the
123 Internal Revenue Code;
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124 (b) An organization that is an investment company under the Investment
125 Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.), as amended;
126 (c) An organization that would be an investment company under the Investment
127 Company Act of 1940, as amended, but for the exception fr om investment company
128 status prov ided under 15 U.S.C. Section 80a-3(c)(1) or 80a-3(c)(7) of the Investment
129 Company Act of 1940; or
130 (d) A qualified community development entity , as defined under 26 U.S.C.
131 Section 45D of the Internal Revenue Code, that is owned, control led, or managed,
132 dir ectly or indir ectly , by a department or agency of this state;
133 (15) "T axable enterprise value tax base", the enterprise value tax base adjusted
134 by the special adjustments prov ided under section 143.3003 and then adjusted by the
135 method of apportionment pr ovided section 143.3006;
136 (16) "T axable period", the calendar or fiscal year , or fractional part of a year ,
137 that a business enterprise uses for federal income tax purposes or if the business
138 enterprise is not requ ired to make and file a r eturn for federal income tax purposes,
139 then the calendar or fiscal year , or fractional part of a year , the enterprise has adopted
140 for financial purposes.
143.3003. 1. Notwithstanding any other pr ovisions of law to the contrary , for all
2 tax years beginning on or after August 28, 2026, in addition to the taxes imposed under
3 this chapter or by general law , a tax shall be imposed at the rate of thr ee-fourths of one
4 per cent upon the taxable enterprise value tax base of every business enterprise in the
5 state of Missouri. The reve nue derived from the additional tax imposed under sections
6 143.3000 to 143.3015 shall be deposited by the state tr easurer in the school district trust
7 fund and shall be distributed as pr ovided in section 144.701.
8 2. The following adjustments shall be made to the enterprise value tax base in
9 determining taxable enterprise value tax base:
10 (1) For each business enterprise the enterprise value tax base of which includes
11 compensation derived fr om net earnings fr om self-employment subject to tax 26 U.S.C.
12 Section 1401 of the Internal Revenue Code, a deduction of such amounts of
13 compensation as ar e reta ined for use in the business enterprise, except that
1 4 compensation deducted under this section shall not be included in this deduction.
15 The business enterprise has the burden to show that any amounts deducted have
16 actually been ret ained for use in the business enterprise;
17 (2) In the case of a business enterprise that is a corporation, a deduction of an
18 amount equal to dividends receiv ed fro m another corporation that have pr eviously been
19 included in the payer corporation's taxable enterprise value tax base subject to taxation
20 under sections 143.3000 to 143.3015 and which payer corporation is, at the close of the
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21 day on which such dividend is receiv ed, a member of the same affiliated grou p as the
22 corporation recei ving the dividend; and
23 (3) In the case of a business enterprise that is not a corporation, a deduction of
24 an amount equal to dividend distributions re ceived fr om another business enterprise
25 that have previ ously been included in the payer business enterprise's taxable enterprise
26 value tax base subject to taxation under sections 143.3000 to 143.3015 and which payer
27 business enterprise is, at the close of the day on which such dividend is r eceived, a
28 member of the same affiliated grou p as the business enterprise re ceiving the dividend
29 distribution. For the purposes of this subdivision, the meaning of the term "affiliated
30 gr oup" shall be determined by rules adopted by the department similar to those
31 applicable to corporations.
32 3. In the case of a pr oprietorship, partnership, or limited liability company filing
33 a ret urn under sections 143.3000 to 143.3015 as a pr oprietorship or partnership, a
34 deduction shall be allowed in an amount equal to a fair and reas onable compensation
35 for the actual personal services of a natural person who is a pr oprietor , partner , or
36 member pro vided to the business organization; prov ided, however , that the amount of
37 such deduction shall not r educe such business organization's taxable business pr ofits to
38 less than zero dollars. Such amounts shall not exceed the amount rep orted as net
39 earnings on the federal income tax ret urns of the pr oprietor , partner , or member , but
40 may also include an amount not to exceed net r ental income as compensation for
41 operating r ental pro perty , and an amount not to exceed fifteen per cent of the gr oss sales
42 price as commissions on the sale of business assets.
43 4. Subject to subsection 5, which establishes a r ecord-keeping safe harbor , the
44 method of determining the amount of the deduction available to the business
45 organization allowed under this section shall use the standards set forth under 26
46 U.S.C. Section 162(a)(1) under the Internal Revenue Code, and the reg ulations,
47 administrative rulings, and judicial cases issued ther eunder . The business organization
48 shall keep such r ecords as may be necessary to determine that the deduction is
49 r easonable under these standards.
50 5. (1) For purposes of this section, "r ecord-keeping safe harbor" means the
51 amount of compensation for personal services claimed by a business organization that
52 does not need to be substantiated by any evidence, records, or legal or regu latory
53 authority , except as pro vided under subsection 6 of this section. However , the record-
54 keeping safe harbor shall not be r elevant or admissible for any purpose in determining
55 whether a compensation deduction claimed in an amount in excess of any such record-
56 keeping safe harbor is fair and r easonable.
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57 (2) In lieu of substantiating the value of the personal services of pr oprietors,
58 partners, or members, a business organization or gr oup of r elated business
5 9 organizations may elect, as a re cord-keeping safe harbor , to deduct up to seventy-five
60 thousand dollars as total compensation for the tax year .
61 6. A business organization or gr oup of relat ed business organizations may elect
62 to use the recor d-keeping safe harbor option under subdivision (2) of subsection 5 of this
63 section without a red etermination of the reas onableness of the deduction by the
64 department. Any such deduction claimed by the business organization or gro up of
65 r elated business organizations shall not be subject to challenge; pro vided, that upon
66 r equest, the business organization or gr oup of relat ed business organizations shall be
67 r equir ed to substantiate that the pr oprietor or at least one partner or member
68 performed actual personal services for the business organization or grou p of r elated
69 business organizations.
70 7. Related business organizations electing not to substantiate the extent of the
71 actual personal services of their prop rietors, partners, and members, are limited to the
72 r ecord-keeping safe harbor deduction, less any owners' compensation taken on the
73 federal tax ret urns of corporate members of the grou p, allocated among the r elated
74 business organizations. For the purposes of this subsection, "r elated business
75 organizations" are unitary business organizations and business organizations that
76 would qualify as unitary but for the fact that they conduct business only within this
77 state.
78 8. A business enterprise claiming a deduction under this section bears the
79 burden of pr oving that all pr oprietors, partners, or members for whom a deduction is
80 being claimed provi ded actual personal services to the business enterprise at any time
81 during the taxable period. Once a business organization has satisfied this burden of
82 pr oof, the amount claimed as a deduction is presum ed to be reas onable, unless the
83 department pr oves by a prep onderance of the evidence that the deduction claimed by
84 the business enterprise is clearly unr easonable.
143.3006. 1. A business entity , the business activities of which are taxable both
2 within and without this state and which is subject to a tax of the type imposed by
3 sections 143.3000 to 143.3015 or is subject to the jurisdiction of another state to impose a
4 business privilege tax, a tax on net earnings, a franchise tax measur ed by net earnings, a
5 capital stock tax, or a tax of the type imposed by sections 143.3000 to 143.3015 shall
6 apportion its enterprise value tax base so as to allocate to this state a fair and equitable
7 pr oportion of such base.
8 2. Except as otherwise pr ovided in this section, the apportionment shall be made
9 in the following manner:
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10 (1) The portion of the base fr om compensation shall:
11 (a) Include the amount of any deduction taken under section 143.3003, the
12 amount r elating to self-employment income, and the amount relat ing to wages and
13 salaries subject to or specifically exempt fr om withholding under 26 U.S.C. Section 3401
14 of the Internal Revenue Code, except such payments as ar e made express ly exempt fr om
15 withholding under 26 U.S.C. Sections 3401(a)(1), (9), (10), (13), (14), (15), (16), (18), (19),
16 and (20); and
17 (b) Be apportioned to this state as a per centage of total compensation paid by the
18 business enterprise to employees everywhere as is paid by the business enterprise to
19 employees for services rend ered within this state. Such compensation is deemed to be
20 disbursed for services in this state if:
21 a. The service is performed entirely within this state;
22 b. The service is performed both within and without this state, and the service
23 performed without this state is incidental to the service within this state; or
24 c. Some of the service is performed in this state; and
25 (i) The base of operations or the place fr om which the service is dire cted or
26 contr olled is located in this state; or
27 (ii) The base of operations or the place fr om which the service is dir ected or
28 contr olled is not located in any state in which some part of the service is performed, but
29 the individual performing such service res ides within this state;
30 (2) The portion of the base fro m inter est shall be apportioned by multiplying the
31 per centage of value of the total real and tangible personal prop erty owned and
32 employed by the business enterprise everywhere as is owned and employed by it in
33 business activities in this state. Pr operty owned by the business enterprise shall be
34 valued at its original cost; and
35 (3) The portion of the base fr om dividends shall be apportioned on the basis of
36 the following thr ee factors, giving equal weight to each, and applying the average of the
37 thr ee per centages to the dividends:
38 (a) The compensation factor determined in accordance with paragraph (b) of
39 subdivision (1) of this subsection;
40 (b) The interes t apportionment factor calculated in accordance with subdivision
41 (2) of this subsection; and
42 (c) The per centage of the total sales, including charges for services, made by the
43 business enterprise everywhere as is made by it within this state and determined as
44 follows:
45 a. Sales of tangible personal pr operty ar e made in this state if:
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46 (i) The pr operty is deliver ed or shipped to a purc haser , other than the United
47 States government, within this state rega rdless of fr ee on board point or other
48 conditions of sale; or
49 (ii) The pr operty is shipped fr om an office, stor e, war ehouse, factory , or other
50 place of storage in this state and:
51 i. The pur chaser is the United States government; or
52 ii. The business enterprise is not taxable in the state of the pur chaser;
53 b. Sales other than sales of tangible personal pr operty ar e made in this state if
54 the business enterprise's market for the sales is in this state, as follows:
55 (i) In the case of sale, r ental, lease, or license of rea l pr operty , if and to the extent
56 the pro perty is located in this state;
57 (ii) In the case of ren tal, lease, or license of tangible personal prope rty , if and to
58 the extent the pr operty is located in this state;
59 (iii) In the case of sale of a service, if and to the extent the service is deliver ed to a
60 location in this state;
61 (iv) In the case of sale, rent al, lease, or license of intangible prop erty , if and to the
62 extent the pro perty is used in this state;
63 (v) In the case of interes t income, if and to the extent the debtor or encumber ed
64 pr operty is located in this state;
65 (vi) In the case of dividend income, if and to the extent the business enterprise's
66 commer cial domicile is in this state; and
67 (vii) In the case of other income, if and to the extent the income is derived fr om
68 sour ces in this state;
69 c. In the case of sales other than sales of tangible personal pro perty , if the state
70 or states of assignment cannot be determined, the state or states of assignment shall be
71 r easonably appr oximated; and
72 d. In the case of sales other than sales of tangible personal prop erty , if the
73 taxpayer is not taxable in a state to which a sale is assigned, or if the state of assignment
74 cannot be determined or reas onably appr oximated, then the sale is excluded fr om the
75 denominator of the sales factor .
76 3. If the method of apportionment in subsection 2 of this section does not fairly
77 r epresent the business enterprise's business activity in this state, then the business
78 enterprise may petition for , or the department may requ ire, in res pect to all or part of
79 the business enterprise's business activity , if reas onable:
80 (1) The exclusion of one or mor e of the apportionment factors;
81 (2) The inclusion of one or mor e additional apportionment factors that will fairly
82 r epresent the business enterprise's business activity in the state; or
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83 (3) The employment of another method to effect an equitable apportionment of
84 the business enterprise's enterprise value tax base.
143.3009. 1. A business enterprise having gr oss business receipts in excess of two
2 hundr ed fifty thousand dollars during the taxable period or an enterprise value tax base
3 that is great er than two hundred fifty thousand dollars shall make a ret urn to the
4 department in accordance with the following schedule:
5 (1) If requ ired to file a United States partnership tax ret urn, then on or before
6 the fifteenth day of the third month following expiration of its taxable period;
7 (2) If req uired to file a United States exempt organization r eturn, then on or
8 befor e the fifteenth day of the fifth month following expiration of its taxable period; and
9 (3) For all other business enterprises, on or befor e the fifteenth day of the fourth
10 month following expiration of its taxable period.
11 2. The department shall biennially adjust these thr eshold amounts roun ding to
12 the near est one thousand dollars based on the twenty-four -month per centage change as
13 measur ed by Consumer Price Index for All Urban Consumers for the Midwest Region,
14 as defined and officially re corded by the Bureau of Labor Statistics, or its successor
15 index, using the amount published for the month of June in the year prior to the start of
16 the tax year .
17 3. All retu rns shall be signed by the business enterprise or by its authorized
18 r epresent ative under penalty of perjury .
19 4. A business enterprise shall also file a declaration of its estimated business
20 enterprise tax for its subsequent taxable period; pr ovided, however , that if the estimated
21 tax is less than two hundred sixty dollars, a declaration need not be filed. A declaration
22 shall be filed at the end of any quarter in which the estimated tax is great er than or
23 equal to two hundred sixty dollars. The declaration shall be filed when payments are
24 due under subsection 5 of this section.
25 5. A business enterprise requi red to file a declaration of its estimated business
26 enterprise tax under subsection 4 of this section shall make payments of the estimated
27 tax in installments as follows:
28 (1) T wenty-five per cent is due and payable on the fifteenth day of the third
29 month of the subsequent tax year;
30 (2) T wenty-five per cent is due and payable on the fifteenth day of the sixth
31 month of the subsequent tax year;
32 (3) T wenty-five per cent is due and payable on the fifteenth day of the ninth
33 month of the subsequent tax year; and
34 (4) T wenty-five perce nt is due and payable on the fifteenth day of the twelfth
35 month of the subsequent tax year .
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36 6. If the ret urn req uired under this section shows an amount to be due, the
37 amount is due and payable on the prescribed payment date. If the r eturn shows an
38 overpayment of the tax due, the department shall r efund or cr edit the overpayment to
39 the business enterprise in accordance rules or standards set out by the department.
40 7. When the department has r eason to believe that a business enterprise failed to
41 file a ret urn or to include any part of its enterprise value tax base in a filed ret urn, the
42 department may requ ire the enterprise to file a r eturn or a supplementary retu rn
43 showing such additional information as the department pr escribes. Upon the receipt of
44 the supplementary re turn, or if none is r eceived within the time set by the department,
45 the department may find and assess the amount due based upon the information that is
46 available. The making of the additional ret urn does not r elieve the business enterprise
47 of any penalty for failur e to make a correct original r eturn or reli eve it from liability for
48 inter est or any other additional charges imposed by the department.
49 8. For good cause, the department may extend the time within which a business
50 enterprise is r equir ed to file a r eturn. If the r eturn is filed during the period of
51 extension, a penalty shall not be imposed for failure to file the re turn at the time
52 r equir ed by this section but the business enterprise shall be liable for interest and late
53 payment charges. Failur e to file the re turn during the period of the extension voids the
54 extension.
143.3012. 1. A business organization shall file an election with the department to
2 be a qualified investment company with res pect to any taxable period on a form
3 pr escribed by the department at any time on or before the fifteenth day of the third
4 month of the taxable period. An election is effective for the taxable period of the
5 qualified investment company for which it is made and for all succeeding taxable
6 periods until the election is terminated as provi ded in this section.
7 2. A business organization electing tr eatment as a qualified investment company
8 shall, with res pect to each taxable period, file a re port, in accordance with such rules or
9 forms as the department may pr escribe, setting forth the following:
10 (1) The aggr egate amounts of funds invested in the qualified investment
11 company;
12 (2) The names, addr esses, and federal taxpayer identification numbers of the
13 holders of the qualified investment company and the amount, if any , of their
14 pr oportional shar e of the net earnings requ ired to be included in the holder's state
15 tax ret urn;
16 (3) The name, addr ess, and federal taxpayer identification number of the
17 manager of the qualified investment company;
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18 (4) The amount of the net earnings receive d and expenses incurr ed by the
19 qualified investment company for the tax period; and
20 (5) Notwithstanding this section, a qualified investment company has satisfied
21 the r eporting r equir ements of this section if it files with the department a copy of its
22 federal income tax r eturn, as filed with the Internal Revenue Service.
23 3. (1) The r eport or copy of the federal income tax r eturn shall be filed on or
24 befor e thirty days following the filing of the federal income tax r eturn with the Internal
25 Revenue Service.
26 (2) A qualified investment company that fails to timely file the r eport as r equir ed
27 by this section shall pay a penalty equal to one hundred dollars for each day the r eport is
28 not filed, unless an extension has been granted by the department. A monetary fine
29 imposed by this subdivision shall not exceed five thousand dollars.
30 (3) A qualified investment company notified by the department that the report is
31 overdue by mor e than fifty days has thirty days fr om the date of the notification to file
32 the delinquent repo rt. If the delinquent repor t is not filed within thirty days after
33 notification, the department shall disallow the business organization qualified
3 4 investment company status for the tax periods for which a timely rep ort is not filed.
35 4. The election pr ovided for in subsection 1 of this section may be terminated as
36 follows:
37 (1) By revok ing the election by consent of the majority of the members, partners,
38 or shar eholders of the qualified investment company , or by determination of the
39 manager of the qualified investment company . The re vocation shall be filed with the
40 department on or before the fifteenth day of the third month of the taxable period to be
41 effective for the period. A r evocation filed after the fifteenth day of the third month of
42 the taxable period shall be effective for the following tax period; or
43 (2) Whenever the company ceases to satisfy the re quir ements for qualification as
44 a qualified investment company under section 143.3000.
143.3015. 1. A business enterprise shall r eport to the department any change in
2 the amount of the business enterprise's compensation, inter est, or dividends as finally
3 determined by the Internal Revenue Service with res pect to any previo us year for which
4 the business enterprise has made a r eturn under sections 143.3000 to 143.3015. The
5 r eport shall be made not later than six months after the business enterprise has receiv ed
6 notice that the change has finally been determined. Notwithstanding any other law , a
7 business enterprise reporting a correct ion under this section shall be given notice by the
8 department of any adjustment to the tax due with res pect to the correct ion within six
9 months after the filing of the rep ort.
10 2. A business enterprise shall:
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11 (1) Keep such rec ords as may be necessary to determine the amount of its tax
12 liability under sections 143.3000 to 143.3015;
13 (2) Pr eserve the record s for the period of five years or until any litigation or
14 pr osecution under this chapter is finally determined; and
15 (3) Make the record s available for inspection by the department or authorized
16 agents, upon demand, at reas onable times during regul ar business hours.
17 3. Any taxpayer who fails to comply with the pr ovisions of subsection 2 of this
18 section shall be assessed taxes, plus any applicable penalty and interes t based on the best
19 information available to the department; and the burden shall be on the taxpayer to
20 show by clear and convincing evidence that the assessment is incorr ect.
21 4. The administration and the tax imposed under the pr ovisions of sections
22 143.3000 to 143.3015 shall be assessed, collected, and paid in the same manner as taxes
23 imposed under this chapter . The department may promul gate all necessary rules and
24 r egulations for the administration of sections 143.3000 to 143.3015. Any rule or portion
25 of a rule, as that term is defined in section 536.010, that is cr eated under the authority
26 delegated in this section shall become effective only if it complies with and is subject to
27 all of the pr ovisions of chapter 536 and, if applicable, section 536.028. This section and
28 chapter 536 are nonseverable and if any of the powers vested with the general assembly
29 pursuant to chapter 536 to revi ew , to delay the effective date, or to disappr ove and annul
30 a rule are subsequently held unconstitutional, then the grant of rulemaking authority
31 and any rule prop osed or adopted after August 28, 2026, shall be invalid and void.
144.014. 1. (1) Notwithstanding other provisions of law to the contrary , beginning
2 October 1, 1997, but ending on or before December 31, 2030, the tax levied and imposed
3 under this chapter on all retail sales of food shall be at the rate of one percent , except as
4 pr ovided under subdivisions (2), (3), and (4) of this subsection . The revenue derived from
5 the one percent rate pursuant to this section shall be deposited by the state treasurer in the
6 school district trust fund and shall be distributed as provided in section 144.701.
7 (2) Notwithstanding any pro vision of law to the contrary , beginning August 28,
8 2026, ther e shall be no state sales or use tax levied or imposed on any ret ail sale of food
9 in this state. The exemption granted under this subsection shall not apply to local sales
10 tax as defined under section 32.085 or local use tax, levied or imposed as authorized by
11 law , except as pr ovided under subdivision (3) of this subsection.
12 (3) Beginning January 1, 2027, the rate of local sales and use tax imposed on all
13 r etail sales of food shall annually be red uced in four equal incr ements over a period of
14 four years.
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15 (4) Beginning January 1, 2031, notwithstanding other provi sions of law to the
16 contrary , ther e shall be no local sales tax as defined in section 32.085 or local use tax
17 levied or imposed on any r etail sale of food in this state.
18 2. For the purposes of this section, the term "food" shall include only those products
19 and types of food for which [ food stamps ] benefits may be redeemed pursuant to the
20 provisions of the [ Federal Food Stamp ] Supplemental Nutrition Assistance Program as
21 contained in 7 U.S.C. Section 2012, as that section now reads or as it may be amended
22 hereafter , and shall include food dispensed by or through vending machines. For the purpose
23 of this section, except for vending machine sales, the term "food" shall not include food or
24 drink sold by any establishment where the gross receipts derived from the sale of food
25 prepared by such establishment for immediate consumption on or off the premises of the
26 establishment constitutes more than eighty percent of the total gross receipts of that
27 establishment, regardless of whether such prepared food is consumed on the premises of that
28 establishment, including, but not limited to, sales of food by any restaurant, fast food
29 restaurant, delicatessen, eating house, or café.
✔
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