4416S.09F
1
SENATE SUBSTITUTE
FOR
HOUSE COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 2587
AN ACT
To repeal sections 130.029, 143.022, 143.071,
143.081, 144.030, and 285.730, RSMo, and to enact in
lieu thereof twenty -one new sections relating to
business entities.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Sections 130.029, 143.022, 143.071, 143.081, 1
144.030, and 285.730, RSMo, are repealed and twenty -one new 2
sections enacted in lieu thereof, to be known as sections 3
34.195, 64.008, 65.710, 71.990, 89.500, 130.029, 143.022, 4
143.071, 143.081, 143.436, 144.030, 285.730, 407.475, 620.3800, 5
620.3900, 620.3905, 620.3910, 620.3915, 620.3920, 620.3925, and 6
620.3930, to read as follows:7
34.195. 1. This section shall be known and may be 1
cited as the "Right-to-Start Act". 2
2. No later than June 30, 2024, and annually 3
thereafter, the commissioner of administration shall file a 4
report with the general assembly that includes, but is not 5
limited to: 6
(1) The number of contracts awarded to businesses that 7
have been in operation for less than three years; 8
(2) The percentage of the number of contracts awarded 9
to businesses that have been in operation for less than 10
three years compared to the total number of contracts 11
awarded; 12
2
(3) The total dollar amount of all contracts awar ded 13
to businesses that have been in operation for less than 14
three years; 15
(4) The percentage of the total dollar amount of 16
contracts awarded to businesses that have been in operation 17
for less than three years compared to the total dollar 18
amount of contracts awarded; and 19
(5) The number and total dollar amount of contracts 20
awarded to minority-owned businesses compared to the total 21
number and dollar amount of contracts awarded. 22
3. The commissioner of administration, in conjunction 23
with the office of entrepreneurship under section 620.3800, 24
shall produce and file a report with the general assembly 25
making recommendations on improving access and resources for 26
new Missouri businesses that have been in operation for less 27
than three years on or before January 1, 2024. The report 28
shall also include recommendations on improving access and 29
resources for new minority -owned Missouri businesses that 30
have been in operation for less than three years on or 31
before January 1, 2024. 32
64.008. 1. As used in this section, the term "home - 1
based work" means any lawful occupation performed by a 2
resident within a residential home or accessory structure, 3
which is clearly incidental and secondary to the use of the 4
dwelling unit for residential purposes and does not change 5
the residential character of the residential building or 6
adversely affect the character of the surrounding 7
neighborhood. 8
2. A zoning ordinance or regulation adopted pursuant 9
to this chapter that regulates home-based work shall not: 10
(1) Prohibit mail order or telephone sales for home - 11
based work; 12
3
(2) Prohibit service by appointment within the home or 13
accessory structure; 14
(3) Prohibit or require structural modifications to 15
the home or accessory structure; 16
(4) Restrict the hours of operation for home -based 17
work; or 18
(5) Restrict storage or the use of equipment that does 19
not produce effects outside the home or accessory structure. 20
3. A zoning ordinance or regulation adopte d pursuant 21
to this chapter that regulates home -based work shall not 22
contain provisions that explicitly restrict or prohibit a 23
particular occupation. 24
4. The application of this section does not supersede 25
any deed restriction, covenant, or agreemen t restricting the 26
use of land nor any master deed, by law or other document 27
applicable to a common interest ownership community. 28
65.710. 1. As used in this section, the term "home - 1
based work" means any lawful occupation performed by a 2
resident within a residential home or accessory structure, 3
which is clearly incidental and secondary to the use of the 4
dwelling unit for residential purposes and does not change 5
the residential character of the residential building or 6
adversely affect the character of the surrounding 7
neighborhood. 8
2. A zoning ordinance or regulation adopted pursuant 9
to this chapter that regulates home -based work shall not: 10
(1) Prohibit mail order or telephone sales for home - 11
based work; 12
(2) Prohibit service by appointment within the home or 13
accessory structure; 14
(3) Prohibit or require structural modifications to 15
the home or accessory structure; 16
4
(4) Restrict the hours of operation for home -based 17
work; or 18
(5) Restrict storage or the use of equipment that does 19
not produce effects outside the home or accessory structure. 20
3. A zoning ordinance or regulation adopted pursuant 21
to this chapter that regulates home -based work shall not 22
contain provisions that explicitly restric t or prohibit a 23
particular occupation. 24
4. The application of this section does not supersede 25
any deed restriction, covenant, or agreement restricting the 26
use of land nor any master deed, by law or other document 27
applicable to a common interest ow nership community. 28
71.990. 1. As used in this section, the following 1
terms mean: 2
(1) "Goods", any merchandise, equipment, products, 3
supplies, or materials; 4
(2) "Home-based business", any business operated in a 5
residential dwelling that manufactures, provides, or sells 6
goods or services and that is owned and operated by the 7
owner or tenant of the residential dwelling. 8
2. Any person who resides in a residential dwelling 9
may use the residential dwelling for a home -based business 10
unless such use is restricted by: 11
(1) Any deed restriction, covenant, or agreement 12
restricting the use of land; or 13
(2) Any master deed, bylaw, or other document 14
applicable to a common -interest ownership community. 15
3. Except as prescribed under subsection 4 of this 16
section, a political subdivision shall not prohibit the 17
operation of a no-impact, home-based business or otherwise 18
require a person to apply for, register for, or obtain any 19
permit, license, variance, or ot her type of prior approval 20
from the political subdivision to operate a no -impact, home- 21
5
based business. For the purposes of this section, a home - 22
based business qualifies as a no -impact, home-based business 23
if: 24
(1) The total number of employees an d clients on-site 25
at one time does not exceed the occupancy limit for the 26
residential dwelling; and 27
(2) The activities of the business: 28
(a) Are limited to the sale of lawful goods and 29
services; 30
(b) May involve having more than one clie nt on the 31
property at one time; 32
(c) Do not cause a substantial increase in traffic 33
through the residential area; 34
(d) Do not violate any parking regulations established 35
by the political subdivision; 36
(e) Occur inside the residential dwel ling or in the 37
yard of the residential dwelling; 38
(f) Are not visible from the street; and 39
(g) Do not violate any narrowly tailored regulation 40
established under subsection 4 of this section. 41
4. A political subdivision may establish reaso nable 42
regulations on a home -based business if the regulations are 43
narrowly tailored for the purpose of: 44
(1) Protecting the public health and safety, including 45
regulations related to fire and building codes, health and 46
sanitation, transportation o r traffic control, solid or 47
hazardous waste, pollution, and noise control; or 48
(2) Ensuring that the business activity is compliant 49
with state and federal law and paying applicable taxes. 50
5. No political subdivision shall require a person, as 51
a condition of operating a home -based business, to: 52
(1) Rezone the property for commercial use; 53
6
(2) Obtain a home-based business license or other 54
general business license; or 55
(3) Install or equip fire sprinklers in a single - 56
family detached residential dwelling or any residential 57
dwelling with no more than two dwelling units. 58
6. Whether a regulation complies with this section is 59
a judicial question, and the political subdivision that 60
enacts the regulation shall establish by clea r and 61
convincing evidence that the regulation complies with this 62
section. 63
89.500. 1. As used in this section, the term "home - 1
based work" means any lawful occupation performed by a 2
resident within a residential home or accessory s tructure, 3
which is clearly incidental and secondary to the use of the 4
dwelling unit for residential purposes and does not change 5
the residential character of the residential building or 6
adversely affect the character of the surrounding 7
neighborhood. 8
2. A zoning ordinance or regulation adopted pursuant 9
to this chapter that regulates home -based work shall not: 10
(1) Prohibit mail order or telephone sales for home - 11
based work; 12
(2) Prohibit service by appointment within the home or 13
accessory structure; 14
(3) Prohibit or require structural modifications to 15
the home or accessory structure; 16
(4) Restrict the hours of operation for home -based 17
work; or 18
(5) Restrict storage or the use of equipment that does 19
not produce effects outside the home or accessory structure. 20
3. A zoning ordinance or regulation adopted pursuant 21
to this chapter that regulates home -based work shall not 22
7
contain provisions that explicitly restrict or prohibit a 23
particular occupation. 24
4. The application of this section does not supersede 25
any deed restriction, covenant, or agreement restricting the 26
use of land nor any master deed, by law or other document 27
applicable to a common interest ownership community. 28
130.029. 1. Nothing herein contained shall be 1
construed to prohibit any corporation organized under any 2
general or special law of this state, or any other state or 3
by an act of the Congress of the United States or any labor 4
organization, cooperative association or mutual association 5
from making any contributions or expenditures, provided: 6
(1) That the board of directors of any corporation by 7
resolution has authorized contributions or expenditures, or 8
by resolution has authorized a designated officer to make 9
such contributions or expenditures; or 10
(2) That the members of any labor organization, 11
cooperative association or mutual association have 12
authorized contributions or expenditures by a majority vote 13
of the members present at a duly called meeting of any such 14
labor organization, cooperative association or mutual 15
association or by such vote has authorized a designated 16
officer to make such contributions or expenditures. 17
2. No provision of this section shall be construed to 18
authorize contributions or expenditures otherwise prohibited 19
by, or to change any necessary percentage of vote otherwise 20
required by, the articles of incorporation or association or 21
bylaws of such labor organization, corporation, cooperative 22
or mutual association. 23
3. Authority to make contributions or expenditures as 24
authorized by this section shall be adopted by general or 25
specific resolution. This resolution shall state the total 26
amount of contributions or expenditures authorized, the 27
8
purposes of such contr ibutions or expenditures and the time 28
period within which such authority shall exist. 29
4. (1) Any limited liability company that is duly 30
registered pursuant to chapter 347 and that has not elected 31
to be classified as a corporation under the federa l tax code 32
may make contributions to any committee if the limited 33
liability company has: 34
(a) Been in existence for at least one year prior to 35
such contribution; and 36
(b) Electronically filed with the Missouri ethics 37
commission indicating tha t the limited liability company is 38
a legitimate business with a legitimate business interest 39
and is not created for the sole purpose of making campaign 40
contributions. 41
(2) The Missouri ethics commission shall develop a 42
method for limited liability companies to use for purposes 43
of paragraph (b) of subdivision (1) of this subsection. The 44
commission shall post all information submitted pursuant to 45
this subdivision on its website in a searchable format. 46
143.022. 1. As used in this section, "business 1
income" means the income greater than zero arising from 2
transactions in the regular course of all of a taxpayer's 3
trade or business and shall be limited to the Missouri 4
source net profit from the combination of the following: 5
(1) The total combined profit as properly reported to 6
the Internal Revenue Service on each Schedule C, or its 7
successor form, filed; and 8
(2) The total partnership and S corporation income or 9
loss properly reported to the Internal Revenue Serv ice on 10
Part II of Schedule E, or its successor form. 11
2. In addition to all other modifications allowed by 12
law, there shall be subtracted from the federal adjusted 13
gross income of an individual taxpayer a percentage of such 14
9
individual's business i ncome, to the extent that such 15
amounts are included in federal adjusted gross income when 16
determining such individual's Missouri adjusted gross income. 17
3. In the case of an S corporation described in 18
section 143.471 or a partnership computing the deduction 19
allowed under subsection 2 of this section, taxpayers 20
described in subdivision (1) or (2) of this subsection shall 21
be allowed such deduction apportioned in proportion to their 22
share of ownership of the business as reported on the 23
taxpayer's Schedule K-1, or its successor form, for the tax 24
period for which such deduction is being claimed when 25
determining the Missouri adjusted gross income of: 26
(1) The shareholders of an S corporation as described 27
in section 143.471; 28
(2) The partners in a partnership. 29
4. The percentage to be subtracted under subsection 2 30
of this section shall be increased over a period of years. 31
Each increase in the percentage shall be by five percent and 32
no more than one increase shall occur in a calenda r year. 33
The maximum percentage that may be subtracted is twenty 34
percent of business income. Any increase in the percentage 35
that may be subtracted shall take effect on January first of 36
a calendar year and such percentage shall continue in effect 37
until the next percentage increase occurs. An increase 38
shall only apply to tax years that begin on or after the 39
increase takes effect. 40
5. An increase in the percentage that may be 41
subtracted under subsection 2 of this section shall only 42
occur if the amount of net general revenue collected in the 43
previous fiscal year exceeds the highest amount of net 44
general revenue collected in any of the three fiscal years 45
prior to such fiscal year by at least one hundred fifty 46
million dollars. 47
10
6. The first year that a taxpayer may make the 48
subtraction under subsection 2 of this section is 2017, 49
provided that the provisions of subsection 5 of this section 50
are met. If the provisions of subsection 5 of this section 51
are met, the percentage that may be sub tracted in 2017 is 52
five percent. 53
7. As used in this section, the term "new business 54
income" means any business income from a taxpayer that 55
begins business operations in this state on or after January 56
1, 2023. The term "new business income" shall not include 57
any business income from a taxpayer that began business 58
operations in this state prior to January 1, 2023, dissolved 59
or otherwise terminated such business operations and 60
reincorporates, or otherwise reinstates such business 61
operations on or after January 1, 2023. 62
8. The first one hundred thousand dollars of any 63
remaining amount of new business income included in a 64
taxpayer's Missouri adjusted gross income after the 65
subtraction provided for in subsection 2 of this section 66
shall be reduced for the first through third tax years in 67
which the taxpayer's business is in operation by twenty 68
percent. 69
143.071. 1. For all tax years beginning before 1
September 1, 1993, a tax is hereby imposed upon the Missouri 2
taxable income of corporations in an amount equal to five 3
percent of Missouri taxable income. 4
2. For all tax years beginning on or after September 5
1, 1993, and ending on or before December 31, 2019, a tax is 6
hereby imposed upon the Missouri taxable inco me of 7
corporations in an amount equal to six and one -fourth 8
percent of Missouri taxable income. 9
3. For all tax years beginning on or after January 1, 10
2020, a tax is hereby imposed upon the Missouri taxable 11
11
income of corporations in an amount equa l to four percent of 12
Missouri taxable income. 13
4. As used in this section, the term "eligible new 14
corporation" means a corporation validly licensed as 15
provided in the applicable laws of this state that begins 16
operations in this state on and after January 1, 2023. The 17
term "eligible new corporation" shall not include any 18
corporation that dissolves or otherwise terminates business 19
operations and reincorporates or otherwise reinitiates 20
operations in this state on or after January 1, 2023. 21
5. (1) For all tax years beginning on and after 22
January 1, 2023, in lieu of the tax imposed pursuant to 23
subsection 3 of this section, a tax is hereby imposed upon 24
the Missouri taxable income of each eligible new corporation 25
for the first through third tax years of such eligible 26
corporation of three percent for the first one hundred 27
thousand dollars of income and any remaining portion of 28
income shall be taxed at a rate of four percent. 29
(2) For the fourth tax year of an eligible new 30
corporation and for all tax years thereafter, all income 31
shall be taxed as otherwise provided for in law. 32
6. The provisions of this section shall not apply to 33
out-of-state businesses operating under sections 190.270 to 34
190.285. 35
143.081. 1. A resident individual, resident estate, 1
and resident trust shall be allowed a credit against the tax 2
otherwise due pursuant to sections 143.005 to 143.998 for 3
the amount of any income tax imposed for the taxable year by 4
another state of the United States (or a political 5
subdivision thereof) or the District of Columbia on income 6
derived from sources therein and which is also subject to 7
tax pursuant to sections 143.005 to 143.998. For purposes 8
of this subsection, the phrase "income tax imposed" s hall be 9
12
that amount of tax before any income tax credit allowed by 10
such other state or the District of Columbia if the other 11
state or the District of Columbia authorizes a reciprocal 12
benefit for residents of this state. 13
2. The credit provided pur suant to this section shall 14
not exceed an amount which bears the same ratio to the tax 15
otherwise due pursuant to sections 143.005 to 143.998 as the 16
amount of the taxpayer's Missouri adjusted gross income 17
derived from sources in the other taxing jurisdi ction bears 18
to the taxpayer's Missouri adjusted gross income derived 19
from all sources. In applying the limitation of the 20
previous sentence to an estate or trust, Missouri taxable 21
income shall be substituted for Missouri adjusted gross 22
income. If the tax of more than one other taxing 23
jurisdiction is imposed on the same item of income, the 24
credit shall not exceed the limitation that would result if 25
the taxes of all the other jurisdictions applicable to the 26
item were deemed to be of a single jurisdi ction. 27
3. (1) For the purposes of this section, in the case 28
of an S corporation, each resident S shareholder shall be 29
considered to have paid a tax imposed on the shareholder in 30
an amount equal to the shareholder's pro rata share of any 31
net income tax paid by the S corporation to a state which 32
does not measure the income of shareholders on an S 33
corporation by reference to the income of the S corporation 34
or where a composite return and composite payments are made 35
in such state on behalf of the S shareholders by the S 36
corporation. 37
(2) A resident S shareholder shall be eligible for a 38
credit issued pursuant to this section in an amount equal to 39
the shareholder's pro rata share of any income tax imposed 40
pursuant to chapter 143 on income d erived from sources in 41
another state of the United States, or a political 42
13
subdivision thereof, or the District of Columbia, and which 43
is subject to tax pursuant to chapter 143 but is not subject 44
to tax in such other jurisdiction. 45
4. For purposes of subsection 3 of this section, in 46
the case of an S corporation that is a bank chartered by a 47
state, the Office of Thrift Supervision, or the comptroller 48
of currency, each Missouri resident S shareholder of such 49
out-of-state bank shall qualify for the shareholder's pro 50
rata share of any net tax paid, including a bank franchise 51
tax based on the income of the bank, by such S corporation 52
where bank payment of taxes are made in such state on behalf 53
of the S shareholders by the S bank to the extent of t he tax 54
paid. 55
143.436. 1. This section shall be known and may be 1
cited as the "SALT Parity Act". 2
2. For the purposes of this section, the following 3
terms shall mean: 4
(1) "Affected business entity", any partnership or S 5
corporation that elects to be subject to tax pursuant to 6
subsection 10 of this section; 7
(2) "Direct member", a member that holds an interest 8
directly in an affected business entity; 9
(3) "Indirect member", a member that itself holds an 10
interest, through a direct or indirect member that is a 11
partnership or an S corporation, in an affected business 12
entity; 13
(4) "Member": 14
(a) A shareholder of an S corporation; 15
(b) A partner in a general partnership, a limited 16
partnership, or a limited liability partnership; or 17
(c) A member of a limited liability company that is 18
treated as a partnership or S corporation for federal income 19
tax purposes; 20
14
(5) "Partnership", the same meaning as provided in 26 21
U.S.C. Section 7701(a)(2 ). The term "partnership" shall 22
include a limited liability company that is treated as a 23
partnership for federal income tax purposes; 24
(6) "S corporation", a corporation or limited 25
liability company that is treated as an S corporation for 26
federal income tax purposes; 27
(7) "Tax year", the tax year of a partnership or S 28
corporation for federal income tax purposes. 29
3. (1) Notwithstanding any provision of law to the 30
contrary, a tax is hereby imposed on each affected business 31
entity that is a partnership and that is doing business in 32
this state. Such affected business entity shall, at the 33
time that the affected business entity's return is due, pay 34
a tax in an amount equal to the sum of the separately and 35
nonseparately computed items, as described in 26 U.S.C. 36
Section 702(a), of the affected business entity, to the 37
extent derived from or connected with sources within this 38
state, as determined pursuant to section 143.455, decreased 39
by the deduction allowed under 26 U.S.C. Section 19 9A 40
computed as if such deduction was allowed to be taken by the 41
affected business entity for federal tax purposes, and 42
increased or decreased by any modification made pursuant to 43
section 143.471 that relates to an item of the affected 44
business entity's income, gain, loss, or deduction, to the 45
extent derived from or connected with sources within this 46
state, as determined pursuant to section 143.455, with such 47
sum multiplied by the highest rate of tax used to determine 48
a Missouri income tax liability for an individual pursuant 49
to section 143.011. An affected entity paying the tax 50
pursuant to this subsection shall include with the payment 51
of such taxes each report provided to a member pursuant to 52
subsection 7 of this section. 53
15
(2) If the amount calculated pursuant to subdivision 54
(1) of this section results in a net loss, such net loss may 55
be carried forward to succeeding tax years for which the 56
affected business entity elects to be subject to tax 57
pursuant to subsection 11 of this section u ntil fully used. 58
4. (1) Notwithstanding any provision of law to the 59
contrary, a tax is hereby imposed on each affected business 60
entity that is an S corporation and that is doing business 61
in this state. Such affected business entity shall, at the 62
time that the affected business entity's return is due, pay 63
a tax in an amount equal to the sum of the separately and 64
nonseparately computed items, as described in 26 U.S.C. 65
Section 1366, of the affected business entity, to the extent 66
derived from or connected with sources within this state, as 67
determined pursuant to section 143.455, decreased by the 68
deduction allowed under 26 U.S.C. Section 199A computed as 69
if such deduction was allowed to be taken by the affected 70
business entity for federal tax purposes, and increased or 71
decreased by any modification made pursuant to section 72
143.471 that relates to an item of the affected business 73
entity's income, gain, loss, or deduction, to the extent 74
derived from or connected with sources within this state , as 75
determined pursuant to section 143.455, with such sum 76
multiplied by the highest rate of tax used to determine a 77
Missouri income tax liability for an individual pursuant to 78
section 143.011. An affected entity paying the tax pursuant 79
to this subsection shall include with the payment of such 80
taxes each report provided to a member pursuant to 81
subsection 7 of this section. 82
(2) If the amount calculated pursuant to subdivision 83
(1) of this section results in a net loss, such net loss may 84
be carried forward to succeeding tax years for which the 85
16
affected business entity elects to be subject to tax 86
pursuant to subsection 11 of this section until fully used. 87
5. If an affected business entity is a direct or 88
indirect member of another affecte d business entity, the 89
member affected business entity shall, when calculating its 90
net income or loss pursuant to subsections 3 or 4 of this 91
section, subtract its distributive share of income or add 92
its distributive share of loss from the affected busi ness 93
entity in which it is a direct or indirect member to the 94
extent that the income or loss was derived from or connected 95
with sources within this state, as determined pursuant to 96
section 143.455. 97
6. A nonresident individual who is a member shal l not 98
be required to file an income tax return pursuant to this 99
chapter for a tax year if, for such tax year, the only 100
source of income derived from or connected with sources 101
within the state for such member, or the member and the 102
member's spouse if a joint federal income tax return is or 103
shall be filed, is from one or more affected business 104
entities and such affected business entity or entities file 105
and pay the tax due under this section. 106
7. Each partnership and S corporation shall report to 107
each of its members, for each tax year, such member's direct 108
pro rata share of the tax imposed pursuant to this section 109
on such partnership or S corporation if it is an affected 110
business entity and its indirect pro rata share of the tax 111
imposed on any affected business entity in which such 112
affected business entity is a direct or indirect member. 113
8. (1) Each member that is subject to the tax imposed 114
pursuant to section 143.011 shall be entitled to a credit 115
against the tax imposed pursuant to s ection 143.011. Such 116
credit shall be in an amount equal to such member's direct 117
and indirect pro rata share of the tax paid pursuant to this 118
17
section by any affected business entity of which such member 119
is directly or indirectly a member. 120
(2) If the amount of the credit authorized by this 121
subsection exceeds such member's tax liability for the tax 122
imposed pursuant to section 143.011, the excess amount shall 123
not be refunded but may be carried forward to each 124
succeeding tax year until such credit is fully taken. 125
9. (1) Each member that is subject to the tax imposed 126
pursuant to section 143.011 as a resident or part -year 127
resident of this state shall be entitled to a credit against 128
the tax imposed pursuant to section 143.011 for such 129
member's direct and indirect pro rata share of taxes paid to 130
another state of the United States or to the District of 131
Columbia, on income of any partnership or S corporation of 132
which such person is a member that is derived therefrom, 133
provided the taxes paid to another state of the United 134
States or to the District of Columbia results from a tax 135
that the director of revenue determines is substantially 136
similar to the tax imposed pursuant to this section. Any 137
such credit shall be calculated in a manner to b e prescribed 138
by the director of revenue, provided such calculation is 139
consistent with the provisions of this section, and further 140
provided that the limitations provided in subsection 2 of 141
section 143.081 shall apply to the credit authorized by this 142
subsection. 143
(2) If the amount of the credit authorized by this 144
subsection exceeds such member's tax liability for the tax 145
imposed pursuant to section 143.011, the excess amount shall 146
not be refunded and shall not be carried forward. 147
10. (1) Each corporation that is subject to the tax 148
imposed pursuant to section 143.071 and that is a member 149
shall be entitled to a credit against the tax imposed 150
pursuant to section 143.071. Such credit shall be in an 151
18
amount equal to such corporation's direct and indirect pro 152
rata share of the tax paid pursuant to this section by any 153
affected business entity of which such corporation is 154
directly or indirectly a member. Such credit shall be 155
applied after all other credits. 156
(2) If the amount of the cr edit authorized by this 157
subsection exceeds such corporation's tax liability for the 158
tax imposed pursuant to section 143.071, the excess amount 159
shall not be refunded but may be carried forward to each 160
succeeding tax year until such credit is fully taken . 161
11. A partnership or an S corporation may elect to 162
become an affected business entity that is required to pay 163
the tax pursuant to this section in any tax year. A 164
separate election shall be made for each taxable year. Such 165
election shall be ma de on such form and in such manner as 166
the director of revenue may prescribe by rule. An election 167
made pursuant to this subsection shall be signed by: 168
(1) Each member of the electing entity who is a member 169
at the time the election is filed; or 170
(2) Any officer, manager, or member of the electing 171
entity who is authorized to make the election and who 172
attests to having such authorization under penalty of 173
perjury. 174
12. The provisions of sections 143.425 and 143.601 175
shall apply to any modi fications made to an affected 176
business entity's federal return, and such affected business 177
entity shall pay any resulting underpayment of tax to the 178
extent not already paid pursuant to section 143.425. 179
13. (1) With respect to an action required o r 180
permitted to be taken by an affected business entity 181
pursuant to this section, a proceeding under section 143.631 182
for reconsideration by the director of revenue, an appeal to 183
the administrative hearing commission, or a review by the 184
19
judiciary with respect to such action, the affected business 185
entity shall designate an affected business entity 186
representative for the tax year, and such affected business 187
entity representative shall have the sole authority to act 188
on behalf of the affected business en tity, and the affected 189
business entity's members shall be bound by those actions. 190
(2) The department of revenue may establish reasonable 191
qualifications and procedures for designating a person to be 192
the affected business entity representative. 193
(3) The affected business entity representative shall 194
be considered an authorized representative of the affected 195
business entity and its members under section 32.057 for the 196
purposes of compliance with this section, or participating 197
in a proceeding described in subdivision (1) of this 198
subsection. 199
14. The provisions of this section shall only apply to 200
tax years ending on or after December 31, 2022. 201
15. The department of revenue may promulgate rules to 202
implement the provisions of this sec tion. Any rule or 203
portion of a rule, as that term is defined in section 204
536.010, that is created under the authority delegated in 205
this section shall become effective only if it complies with 206
and is subject to all of the provisions of chapter 536 and, 207
if applicable, section 536.028. This section and chapter 208
536 are nonseverable and if any of the powers vested with 209
the general assembly pursuant to chapter 536 to review, to 210
delay the effective date, or to disapprove and annul a rule 211
are subsequently held unconstitutional, then the grant of 212
rulemaking authority and any rule proposed or adopted after 213
August 28, 2022, shall be invalid and void. 214
144.030. 1. There is hereby specifically exempted 1
from the provisions of sections 14 4.010 to 144.525 and from 2
the computation of the tax levied, assessed or payable 3
20
pursuant to sections 144.010 to 144.525 such retail sales as 4
may be made in commerce between this state and any other 5
state of the United States, or between this state and any 6
foreign country, and any retail sale which the state of 7
Missouri is prohibited from taxing pursuant to the 8
Constitution or laws of the United States of America, and 9
such retail sales of tangible personal property which the 10
general assembly of the state of Missouri is prohibited from 11
taxing or further taxing by the constitution of this state. 12
2. There are also specifically exempted from the 13
provisions of the local sales tax law as defined in section 14
32.085, section 238.235, and sections 14 4.010 to 144.525 and 15
144.600 to 144.761 and from the computation of the tax 16
levied, assessed or payable pursuant to the local sales tax 17
law as defined in section 32.085, section 238.235, and 18
sections 144.010 to 144.525 and 144.600 to 144.745: 19
(1) Motor fuel or special fuel subject to an excise 20
tax of this state, unless all or part of such excise tax is 21
refunded pursuant to section 142.824; or upon the sale at 22
retail of fuel to be consumed in manufacturing or creating 23
gas, power, steam, electri cal current or in furnishing water 24
to be sold ultimately at retail; or feed for livestock or 25
poultry; or grain to be converted into foodstuffs which are 26
to be sold ultimately in processed form at retail; or seed, 27
limestone or fertilizer which is to be used for seeding, 28
liming or fertilizing crops which when harvested will be 29
sold at retail or will be fed to livestock or poultry to be 30
sold ultimately in processed form at retail; economic 31
poisons registered pursuant to the provisions of the 32
Missouri pesticide registration law, sections 281.220 to 33
281.310, which are to be used in connection with the growth 34
or production of crops, fruit trees or orchards applied 35
before, during, or after planting, the crop of which when 36
21
harvested will be sold at reta il or will be converted into 37
foodstuffs which are to be sold ultimately in processed form 38
at retail; 39
(2) Materials, manufactured goods, machinery and parts 40
which when used in manufacturing, processing, compounding, 41
mining, producing or fabricatin g become a component part or 42
ingredient of the new personal property resulting from such 43
manufacturing, processing, compounding, mining, producing or 44
fabricating and which new personal property is intended to 45
be sold ultimately for final use or consump tion; and 46
materials, including without limitation, gases and 47
manufactured goods, including without limitation slagging 48
materials and firebrick, which are ultimately consumed in 49
the manufacturing process by blending, reacting or 50
interacting with or by becoming, in whole or in part, 51
component parts or ingredients of steel products intended to 52
be sold ultimately for final use or consumption; 53
(3) Materials, replacement parts and equipment 54
purchased for use directly upon, and for the repair and 55
maintenance or manufacture of, motor vehicles, watercraft, 56
railroad rolling stock or aircraft engaged as common 57
carriers of persons or property; 58
(4) Replacement machinery, equipment, and parts and 59
the materials and supplies solely required for the 60
installation or construction of such replacement machinery, 61
equipment, and parts, used directly in manufacturing, 62
mining, fabricating or producing a product which is intended 63
to be sold ultimately for final use or consumption; and 64
machinery and equipme nt, and the materials and supplies 65
required solely for the operation, installation or 66
construction of such machinery and equipment, purchased and 67
used to establish new, or to replace or expand existing, 68
material recovery processing plants in this state . For the 69
22
purposes of this subdivision, a "material recovery 70
processing plant" means a facility that has as its primary 71
purpose the recovery of materials into a usable product or a 72
different form which is used in producing a new product and 73
shall include a facility or equipment which are used 74
exclusively for the collection of recovered materials for 75
delivery to a material recovery processing plant but shall 76
not include motor vehicles used on highways. For purposes 77
of this section, the terms motor vehicle and highway shall 78
have the same meaning pursuant to section 301.010. For the 79
purposes of this subdivision, subdivision (5) of this 80
subsection, and section 144.054, as well as the definition 81
in subdivision (9) of subsection 1 of section 144.01 0, the 82
term "product" includes telecommunications services and the 83
term "manufacturing" shall include the production, or 84
production and transmission, of telecommunications 85
services. The preceding sentence does not make a 86
substantive change in the law and is intended to clarify 87
that the term "manufacturing" has included and continues to 88
include the production and transmission of 89
"telecommunications services", as enacted in this 90
subdivision and subdivision (5) of this subsection, as well 91
as the definition in subdivision (9) of subsection 1 of 92
section 144.010. The preceding two sentences reaffirm 93
legislative intent consistent with the interpretation of 94
this subdivision and subdivision (5) of this subsection in 95
Southwestern Bell Tel. Co. v. Direc tor of Revenue, 78 S.W.3d 96
763 (Mo. banc 2002) and Southwestern Bell Tel. Co. v. 97
Director of Revenue, 182 S.W.3d 226 (Mo. banc 2005), and 98
accordingly abrogates the Missouri supreme court's 99
interpretation of those exemptions in IBM Corporation v. 100
Director of Revenue, 491 S.W.3d 535 (Mo. banc 2016) to the 101
extent inconsistent with this section and Southwestern Bell 102
23
Tel. Co. v. Director of Revenue , 78 S.W.3d 763 (Mo. banc 103
2002) and Southwestern Bell Tel. Co. v. Director of Revenue , 104
182 S.W.3d 226 (Mo. b anc 2005). The construction and 105
application of this subdivision as expressed by the Missouri 106
supreme court in DST Systems, Inc. v. Director of Revenue , 107
43 S.W.3d 799 (Mo. banc 2001); Southwestern Bell Tel. Co. v. 108
Director of Revenue, 78 S.W.3d 763 (Mo. banc 2002); and 109
Southwestern Bell Tel. Co. v. Director of Revenue , 182 110
S.W.3d 226 (Mo. banc 2005), is hereby affirmed. Material 111
recovery is not the reuse of materials within a 112
manufacturing process or the use of a product previously 113
recovered. The material recovery processing plant shall 114
qualify under the provisions of this section regardless of 115
ownership of the material being recovered; 116
(5) Machinery and equipment, and parts and the 117
materials and supplies solely required for the installat ion 118
or construction of such machinery and equipment, purchased 119
and used to establish new or to expand existing 120
manufacturing, mining or fabricating plants in the state if 121
such machinery and equipment is used directly in 122
manufacturing, mining or fabric ating a product which is 123
intended to be sold ultimately for final use or 124
consumption. The construction and application of this 125
subdivision as expressed by the Missouri supreme court in 126
DST Systems, Inc. v. Director of Revenue , 43 S.W.3d 799 (Mo. 127
banc 2001); Southwestern Bell Tel. Co. v. Director of 128
Revenue, 78 S.W.3d 763 (Mo. banc 2002); and Southwestern 129
Bell Tel. Co. v. Director of Revenue , 182 S.W.3d 226 (Mo. 130
banc 2005), is hereby affirmed; 131
(6) Tangible personal property which is used 132
exclusively in the manufacturing, processing, modification 133
or assembling of products sold to the United States 134
government or to any agency of the United States government; 135
24
(7) Animals or poultry used for breeding or feeding 136
purposes, or captive wildli fe; 137
(8) Newsprint, ink, computers, photosensitive paper 138
and film, toner, printing plates and other machinery, 139
equipment, replacement parts and supplies used in producing 140
newspapers published for dissemination of news to the 141
general public; 142
(9) The rentals of films, records or any type of sound 143
or picture transcriptions for public commercial display; 144
(10) Pumping machinery and equipment used to propel 145
products delivered by pipelines engaged as common carriers; 146
(11) Railroad rolling stock for use in transporting 147
persons or property in interstate commerce and motor 148
vehicles licensed for a gross weight of twenty -four thousand 149
pounds or more or trailers used by common carriers, as 150
defined in section 390.020, in the transportation of persons 151
or property; 152
(12) Electrical energy used in the actual primary 153
manufacture, processing, compounding, mining or producing of 154
a product, or electrical energy used in the actual secondary 155
processing or fabricating of the product, or a ma terial 156
recovery processing plant as defined in subdivision (4) of 157
this subsection, in facilities owned or leased by the 158
taxpayer, if the total cost of electrical energy so used 159
exceeds ten percent of the total cost of production, either 160
primary or secondary, exclusive of the cost of electrical 161
energy so used or if the raw materials used in such 162
processing contain at least twenty -five percent recovered 163
materials as defined in section 260.200. There shall be a 164
rebuttable presumption that the raw mat erials used in the 165
primary manufacture of automobiles contain at least twenty - 166
five percent recovered materials. For purposes of this 167
subdivision, "processing" means any mode of treatment, act 168
25
or series of acts performed upon materials to transform and 169
reduce them to a different state or thing, including 170
treatment necessary to maintain or preserve such processing 171
by the producer at the production facility; 172
(13) Anodes which are used or consumed in 173
manufacturing, processing, compounding, mining , producing or 174
fabricating and which have a useful life of less than one 175
year; 176
(14) Machinery, equipment, appliances and devices 177
purchased or leased and used solely for the purpose of 178
preventing, abating or monitoring air pollution, and 179
materials and supplies solely required for the installation, 180
construction or reconstruction of such machinery, equipment, 181
appliances and devices; 182
(15) Machinery, equipment, appliances and devices 183
purchased or leased and used solely for the purpose of 184
preventing, abating or monitoring water pollution, and 185
materials and supplies solely required for the installation, 186
construction or reconstruction of such machinery, equipment, 187
appliances and devices; 188
(16) Tangible personal property purchased by a ru ral 189
water district; 190
(17) All amounts paid or charged for admission or 191
participation or other fees paid by or other charges to 192
individuals in or for any place of amusement, entertainment 193
or recreation, games or athletic events, including museums, 194
fairs, zoos and planetariums, owned or operated by a 195
municipality or other political subdivision where all the 196
proceeds derived therefrom benefit the municipality or other 197
political subdivision and do not inure to any private 198
person, firm, or corporat ion, provided, however, that a 199
municipality or other political subdivision may enter into 200
revenue-sharing agreements with private persons, firms, or 201
26
corporations providing goods or services, including 202
management services, in or for the place of amuseme nt, 203
entertainment or recreation, games or athletic events, and 204
provided further that nothing in this subdivision shall 205
exempt from tax any amounts retained by any private person, 206
firm, or corporation under such revenue -sharing agreement; 207
(18) All sales of insulin, and all sales, rentals, 208
repairs, and parts of durable medical equipment, prosthetic 209
devices, and orthopedic devices as defined on January 1, 210
1980, by the federal Medicare program pursuant to Title 211
XVIII of the Social Security Act of 1965, including the 212
items specified in Section 1862(a)(12) of that act, and also 213
specifically including hearing aids and hearing aid supplies 214
and all sales of drugs which may be legally dispensed by a 215
licensed pharmacist only upon a lawful prescription of a 216
practitioner licensed to administer those items, including 217
samples and materials used to manufacture samples which may 218
be dispensed by a practitioner authorized to dispense such 219
samples and all sales or rental of medical oxygen, home 220
respiratory equipment and accessories including parts, and 221
hospital beds and accessories and ambulatory aids including 222
parts, and all sales or rental of manual and powered 223
wheelchairs including parts, and stairway lifts, Braille 224
writers, electronic Braille equipm ent and, if purchased or 225
rented by or on behalf of a person with one or more physical 226
or mental disabilities to enable them to function more 227
independently, all sales or rental of scooters including 228
parts, and reading machines, electronic print enlarger s and 229
magnifiers, electronic alternative and augmentative 230
communication devices, and items used solely to modify motor 231
vehicles to permit the use of such motor vehicles by 232
individuals with disabilities or sales of over -the-counter 233
or nonprescription d rugs to individuals with disabilities, 234
27
and drugs required by the Food and Drug Administration to 235
meet the over-the-counter drug product labeling requirements 236
in 21 CFR 201.66, or its successor, as prescribed by a 237
health care practitioner licensed to pr escribe; 238
(19) All sales made by or to religious and charitable 239
organizations and institutions in their religious, 240
charitable or educational functions and activities and all 241
sales made by or to all elementary and secondary schools 242
operated at public expense in their educational functions 243
and activities; 244
(20) All sales of aircraft to common carriers for 245
storage or for use in interstate commerce and all sales made 246
by or to not-for-profit civic, social, service or fraternal 247
organizations, including fraternal organizations which have 248
been declared tax-exempt organizations pursuant to Section 249
501(c)(8) or (10) of the 1986 Internal Revenue Code, as 250
amended, in their civic or charitable functions and 251
activities and all sales made to eleemosyn ary and penal 252
institutions and industries of the state, and all sales made 253
to any private not-for-profit institution of higher 254
education not otherwise excluded pursuant to subdivision 255
(19) of this subsection or any institution of higher 256
education supported by public funds, and all sales made to a 257
state relief agency in the exercise of relief functions and 258
activities; 259
(21) All ticket sales made by benevolent, scientific 260
and educational associations which are formed to foster, 261
encourage, and promote progress and improvement in the 262
science of agriculture and in the raising and breeding of 263
animals, and by nonprofit summer theater organizations if 264
such organizations are exempt from federal tax pursuant to 265
the provisions of the Internal Revenue Code and all 266
admission charges and entry fees to the Missouri state fair 267
28
or any fair conducted by a county agricultural and 268
mechanical society organized and operated pursuant to 269
sections 262.290 to 262.530; 270
(22) All sales made to any private not -for-profit 271
elementary or secondary school, all sales of feed additives, 272
medications or vaccines administered to livestock or poultry 273
in the production of food or fiber, all sales of pesticides 274
used in the production of crops, livestock or poultry for 275
food or fiber, all sales of bedding used in the production 276
of livestock or poultry for food or fiber, all sales of 277
propane or natural gas, electricity or diesel fuel used 278
exclusively for drying agricultural crops, natural gas used 279
in the primary manufa cture or processing of fuel ethanol as 280
defined in section 142.028, natural gas, propane, and 281
electricity used by an eligible new generation cooperative 282
or an eligible new generation processing entity as defined 283
in section 348.432, and all sales of farm machinery and 284
equipment, other than airplanes, motor vehicles and 285
trailers, and any freight charges on any exempt item. As 286
used in this subdivision, the term "feed additives" means 287
tangible personal property which, when mixed with feed for 288
livestock or poultry, is to be used in the feeding of 289
livestock or poultry. As used in this subdivision, the term 290
"pesticides" includes adjuvants such as crop oils, 291
surfactants, wetting agents and other assorted pesticide 292
carriers used to improve or enhance th e effect of a 293
pesticide and the foam used to mark the application of 294
pesticides and herbicides for the production of crops, 295
livestock or poultry. As used in this subdivision, the term 296
"farm machinery and equipment" [means] shall mean: 297
(a) New or used farm tractors and such other new or 298
used farm machinery and equipment , including utility 299
vehicles used for any agricultural use, and repair or 300
29
replacement parts thereon and any accessories for and 301
upgrades to such farm machinery and equipment [,] and rotary 302
mowers used [exclusively] for any agricultural purposes [, 303
and]; 304
(b) Supplies and lubricants used exclusively, solely, 305
and directly for producing crops, raising and feeding 306
livestock, fish, poultry, pheasants, chukar, quail, or for 307
producing milk for ultimate sale at retail, including field 308
drain tile[,]; and 309
(c) One-half of each purchaser's purchase of diesel 310
fuel therefor which is: 311
[(a)] a. Used exclusively for agricultural purposes; 312
[(b)] b. Used on land owned or leased for the purpose 313
of producing farm products; and 314
[(c)] c. Used directly in producing farm products to 315
be sold ultimately in processed form or otherwise at retail 316
or in producing farm products to be fed to livestock or 317
poultry to be sold ult imately in processed form at retail; 318
For the purposes of this subdivision, "utility vehicle" 319
shall mean any motorized vehicle manufactured and used 320
exclusively for off-highway use which is more than fifty 321
inches but no more than eighty inches in width, measured 322
from outside of tire rim to outside of tire rim, with an 323
unladen dry weight of three thousand five hundred pounds or 324
less, traveling on four or six wheels. 325
(23) Except as otherwise provided in section 144.032, 326
all sales of metered water service, electricity, electrical 327
current, natural, artificial or propane gas, wood, coal or 328
home heating oil for domestic use and in any city not within 329
a county, all sales of metered or unmetered water service 330
for domestic use: 331
(a) "Domestic use" means that portion of metered water 332
service, electricity, electrical current, natural, 333
30
artificial or propane gas, wood, coal or home heating oil, 334
and in any city not within a county, metered or unmetered 335
water service, which an individual occupant of a residential 336
premises uses for nonbusiness, noncommercial or 337
nonindustrial purposes. Utility service through a single or 338
master meter for residential apartments or condominiums, 339
including service for common areas and facilities and vacant 340
units, shall be deemed to be for domestic use. Each seller 341
shall establish and maintain a system whereby individual 342
purchases are determined as exempt or nonexempt; 343
(b) Regulated utility sellers shall determine whether 344
individual purchases are exempt or n onexempt based upon the 345
seller's utility service rate classifications as contained 346
in tariffs on file with and approved by the Missouri public 347
service commission. Sales and purchases made pursuant to 348
the rate classification "residential" and sales to and 349
purchases made by or on behalf of the occupants of 350
residential apartments or condominiums through a single or 351
master meter, including service for common areas and 352
facilities and vacant units, shall be considered as sales 353
made for domestic use and such sales shall be exempt from 354
sales tax. Sellers shall charge sales tax upon the entire 355
amount of purchases classified as nondomestic use. The 356
seller's utility service rate classification and the 357
provision of service thereunder shall be conclusive as to 358
whether or not the utility must charge sales tax; 359
(c) Each person making domestic use purchases of 360
services or property and who uses any portion of the 361
services or property so purchased for a nondomestic use 362
shall, by the fifteenth day of t he fourth month following 363
the year of purchase, and without assessment, notice or 364
demand, file a return and pay sales tax on that portion of 365
nondomestic purchases. Each person making nondomestic 366
31
purchases of services or property and who uses any porti on 367
of the services or property so purchased for domestic use, 368
and each person making domestic purchases on behalf of 369
occupants of residential apartments or condominiums through 370
a single or master meter, including service for common areas 371
and facilities and vacant units, under a nonresidential 372
utility service rate classification may, between the first 373
day of the first month and the fifteenth day of the fourth 374
month following the year of purchase, apply for credit or 375
refund to the director of revenue and the director shall 376
give credit or make refund for taxes paid on the domestic 377
use portion of the purchase. The person making such 378
purchases on behalf of occupants of residential apartments 379
or condominiums shall have standing to apply to the direct or 380
of revenue for such credit or refund; 381
(24) All sales of handicraft items made by the seller 382
or the seller's spouse if the seller or the seller's spouse 383
is at least sixty-five years of age, and if the total gross 384
proceeds from such sales do not constitute a majority of the 385
annual gross income of the seller; 386
(25) Excise taxes, collected on sales at retail, 387
imposed by Sections 4041, 4071, 4081, 4091, 4161, 4181, 388
4251, 4261 and 4271 of Title 26, United States Code. The 389
director of revenue shall promulgate rules pursuant to 390
chapter 536 to eliminate all state and local sales taxes on 391
such excise taxes; 392
(26) Sales of fuel consumed or used in the operation 393
of ships, barges, or waterborne vessels which are used 394
primarily in or for th e transportation of property or cargo, 395
or the conveyance of persons for hire, on navigable rivers 396
bordering on or located in part in this state, if such fuel 397
is delivered by the seller to the purchaser's barge, ship, 398
or waterborne vessel while it is af loat upon such river; 399
32
(27) All sales made to an interstate compact agency 400
created pursuant to sections 70.370 to 70.441 or sections 401
238.010 to 238.100 in the exercise of the functions and 402
activities of such agency as provided pursuant to the 403
compact; 404
(28) Computers, computer software and computer 405
security systems purchased for use by architectural or 406
engineering firms headquartered in this state. For the 407
purposes of this subdivision, "headquartered in this state" 408
means the office for th e administrative management of at 409
least four integrated facilities operated by the taxpayer is 410
located in the state of Missouri; 411
(29) All livestock sales when either the seller is 412
engaged in the growing, producing or feeding of such 413
livestock, or the seller is engaged in the business of 414
buying and selling, bartering or leasing of such livestock; 415
(30) All sales of barges which are to be used 416
primarily in the transportation of property or cargo on 417
interstate waterways; 418
(31) Electrical energy or gas, whether natural, 419
artificial or propane, water, or other utilities which are 420
ultimately consumed in connection with the manufacturing of 421
cellular glass products or in any material recovery 422
processing plant as defined in subdivision (4) o f this 423
subsection; 424
(32) Notwithstanding other provisions of law to the 425
contrary, all sales of pesticides or herbicides used in the 426
production of crops, aquaculture, livestock or poultry; 427
(33) Tangible personal property and utilities 428
purchased for use or consumption directly or exclusively in 429
the research and development of agricultural/biotechnology 430
and plant genomics products and prescription pharmaceuticals 431
consumed by humans or animals; 432
33
(34) All sales of grain bins for storage of grain for 433
resale; 434
(35) All sales of feed which are developed for and 435
used in the feeding of pets owned by a commercial breeder 436
when such sales are made to a commercial breeder, as defined 437
in section 273.325, and licensed pursuant to sections 438
273.325 to 273.357; 439
(36) All purchases by a contractor on behalf of an 440
entity located in another state, provided that the entity is 441
authorized to issue a certificate of exemption for purchases 442
to a contractor under the provisions of that state's law s. 443
For purposes of this subdivision, the term "certificate of 444
exemption" shall mean any document evidencing that the 445
entity is exempt from sales and use taxes on purchases 446
pursuant to the laws of the state in which the entity is 447
located. Any contractor making purchases on behalf of such 448
entity shall maintain a copy of the entity's exemption 449
certificate as evidence of the exemption. If the exemption 450
certificate issued by the exempt entity to the contractor is 451
later determined by the director of r evenue to be invalid 452
for any reason and the contractor has accepted the 453
certificate in good faith, neither the contractor or the 454
exempt entity shall be liable for the payment of any taxes, 455
interest and penalty due as the result of use of the invalid 456
exemption certificate. Materials shall be exempt from all 457
state and local sales and use taxes when purchased by a 458
contractor for the purpose of fabricating tangible personal 459
property which is used in fulfilling a contract for the 460
purpose of constructin g, repairing or remodeling facilities 461
for the following: 462
(a) An exempt entity located in this state, if the 463
entity is one of those entities able to issue project 464
34
exemption certificates in accordance with the provisions of 465
section 144.062; or 466
(b) An exempt entity located outside the state if the 467
exempt entity is authorized to issue an exemption 468
certificate to contractors in accordance with the provisions 469
of that state's law and the applicable provisions of this 470
section; 471
(37) All sales or other transfers of tangible personal 472
property to a lessor who leases the property under a lease 473
of one year or longer executed or in effect at the time of 474
the sale or other transfer to an interstate compact agency 475
created pursuant to sections 70. 370 to 70.441 or sections 476
238.010 to 238.100; 477
(38) Sales of tickets to any collegiate athletic 478
championship event that is held in a facility owned or 479
operated by a governmental authority or commission, a quasi - 480
governmental agency, a state univers ity or college or by the 481
state or any political subdivision thereof, including a 482
municipality, and that is played on a neutral site and may 483
reasonably be played at a site located outside the state of 484
Missouri. For purposes of this subdivision, "neutra l site" 485
means any site that is not located on the campus of a 486
conference member institution participating in the event; 487
(39) All purchases by a sports complex authority 488
created under section 64.920, and all sales of utilities by 489
such authority at the authority's cost that are consumed in 490
connection with the operation of a sports complex leased to 491
a professional sports team; 492
(40) All materials, replacement parts, and equipment 493
purchased for use directly upon, and for the modification, 494
replacement, repair, and maintenance of aircraft, aircraft 495
power plants, and aircraft accessories; 496
35
(41) Sales of sporting clays, wobble, skeet, and trap 497
targets to any shooting range or similar places of business 498
for use in the normal course of busin ess and money received 499
by a shooting range or similar places of business from 500
patrons and held by a shooting range or similar place of 501
business for redistribution to patrons at the conclusion of 502
a shooting event; 503
(42) All sales of motor fuel, as defined in section 504
142.800, used in any watercraft, as defined in section 505
306.010; 506
(43) Any new or used aircraft sold or delivered in 507
this state to a person who is not a resident of this state 508
or a corporation that is not incorporated in this sta te, and 509
such aircraft is not to be based in this state and shall not 510
remain in this state more than ten business days subsequent 511
to the last to occur of: 512
(a) The transfer of title to the aircraft to a person 513
who is not a resident of this state or a corporation that is 514
not incorporated in this state; or 515
(b) The date of the return to service of the aircraft 516
in accordance with 14 CFR 91.407 for any maintenance, 517
preventive maintenance, rebuilding, alterations, repairs, or 518
installations that are completed contemporaneously with the 519
transfer of title to the aircraft to a person who is not a 520
resident of this state or a corporation that is not 521
incorporated in this state; 522
(44) Motor vehicles registered in excess of fifty -four 523
thousand pounds, and the trailers pulled by such motor 524
vehicles, that are actually used in the normal course of 525
business to haul property on the public highways of the 526
state, and that are capable of hauling loads commensurate 527
with the motor vehicle's registered w eight; and the 528
materials, replacement parts, and equipment purchased for 529
36
use directly upon, and for the repair and maintenance or 530
manufacture of such vehicles. For purposes of this 531
subdivision, "motor vehicle" and "public highway" shall have 532
the meaning as ascribed in section 390.020; 533
(45) All internet access or the use of internet access 534
regardless of whether the tax is imposed on a provider of 535
internet access or a buyer of internet access. For purposes 536
of this subdivision, the following te rms shall mean: 537
(a) "Direct costs", costs incurred by a governmental 538
authority solely because of an internet service provider's 539
use of the public right -of-way. The term shall not include 540
costs that the governmental authority would have incurred i f 541
the internet service provider did not make such use of the 542
public right-of-way. Direct costs shall be determined in a 543
manner consistent with generally accepted accounting 544
principles; 545
(b) "Internet", computer and telecommunications 546
facilities, including equipment and operating software, that 547
comprises the interconnected worldwide network that employ 548
the transmission control protocol or internet protocol, or 549
any predecessor or successor protocols to that protocol, to 550
communicate information of all kinds by wire or radio; 551
(c) "Internet access", a service that enables users to 552
connect to the internet to access content, information, or 553
other services without regard to whether the service is 554
referred to as telecommunications, communicati ons, 555
transmission, or similar services, and without regard to 556
whether a provider of the service is subject to regulation 557
by the Federal Communications Commission as a common carrier 558
under 47 U.S.C. Section 201, et seq. For purposes of this 559
subdivision, internet access also includes: the purchase, 560
use, or sale of communications services, including 561
telecommunications services as defined in section 144.010, 562
37
to the extent the communications services are purchased, 563
used, or sold to provide the service described in this 564
subdivision or to otherwise enable users to access content, 565
information, or other services offered over the internet; 566
services that are incidental to the provision of a service 567
described in this subdivision, when furnished to users a s 568
part of such service, including a home page, electronic 569
mail, and instant messaging, including voice -capable and 570
video-capable electronic mail and instant messaging, video 571
clips, and personal electronic storage capacity; a home page 572
electronic mail and instant messaging, including voice - 573
capable and video-capable electronic mail and instant 574
messaging, video clips, and personal electronic storage 575
capacity that are provided independently or that are not 576
packed with internet access. As used in this subdivision, 577
internet access does not include voice, audio, and video 578
programming or other products and services, except services 579
described in this paragraph or this subdivision, that use 580
internet protocol or any successor protocol and for which 581
there is a charge, regardless of whether the charge is 582
separately stated or aggregated with the charge for services 583
described in this paragraph or this subdivision; 584
(d) "Tax", any charge imposed by the state or a 585
political subdivision of the state for the purpose of 586
generating revenues for governmental purposes and that is 587
not a fee imposed for a specific privilege, service, or 588
benefit conferred, except as described as otherwise under 589
this subdivision, or any obligation imposed on a seller to 590
collect and to remit to the state or a political subdivision 591
of the state any gross retail tax, sales tax, or use tax 592
imposed on a buyer by such a governmental entity. The term 593
tax shall not include any franchise fee or similar fee 594
imposed or authorized un der section 67.1830 or 67.2689; 595
38
Section 622 or 653 of the Communications Act of 1934, 47 596
U.S.C. Section 542 and 47 U.S.C. Section 573; or any other 597
fee related to obligations of telecommunications carriers 598
under the Communications Act of 1934, 47 U.S.C . Section 151, 599
et seq., except to the extent that: 600
a. The fee is not imposed for the purpose of 601
recovering direct costs incurred by the franchising or other 602
governmental authority from providing the specific 603
privilege, service, or benefit conferr ed to the payer of the 604
fee; or 605
b. The fee is imposed for the use of a public right -of- 606
way based on a percentage of the service revenue, and the 607
fee exceeds the incremental direct costs incurred by the 608
governmental authority associated with the pr ovision of that 609
right-of-way to the provider of internet access service. 610
Nothing in this subdivision shall be interpreted as an 611
exemption from taxes due on goods or services that were 612
subject to tax on January 1, 2016. 613
3. Any ruling, agreement, or contract, whether written 614
or oral, express or implied, between a person and this 615
state's executive branch, or any other state agency or 616
department, stating, agreeing, or ruling that such person is 617
not required to collect sales and use tax in this stat e 618
despite the presence of a warehouse, distribution center, or 619
fulfillment center in this state that is owned or operated 620
by the person or an affiliated person shall be null and void 621
unless it is specifically approved by a majority vote of 622
each of the houses of the general assembly. For purposes of 623
this subsection, an "affiliated person" means any person 624
that is a member of the same controlled group of 625
corporations as defined in Section 1563(a) of the Internal 626
Revenue Code of 1986, as amended, as the vendor or any other 627
entity that, notwithstanding its form of organization, bears 628
39
the same ownership relationship to the vendor as a 629
corporation that is a member of the same controlled group of 630
corporations as defined in Section 1563(a) of the Inter nal 631
Revenue Code, as amended. 632
285.730. 1. Except as specifically provided in 1
sections 285.700 to 285.750 or in the professional employer 2
agreement, in each coemployment relationship: 3
(1) The client shall be entitled to exerc ise all 4
rights, and shall be obligated to perform all duties and 5
responsibilities otherwise applicable to an employer in an 6
employment relationship; 7
(2) The PEO shall be entitled to exercise only those 8
rights and obligated to perform only those d uties and 9
responsibilities specifically required under sections 10
285.700 to 285.750 or set forth in the professional employer 11
agreement. The rights, duties, and obligations of the PEO 12
as coemployer with respect to any covered employee shall be 13
limited to those arising pursuant to the professional 14
employer agreement and sections 285.700 to 285.750 during 15
the term of coemployment by the PEO of such covered 16
employee; and 17
(3) Unless otherwise expressly agreed by the PEO and 18
the client in a profes sional employer agreement, the client 19
retains the exclusive right to direct and control the 20
covered employees as is necessary to conduct the client's 21
business, to discharge any of the client's fiduciary 22
responsibilities, or to comply with any licensure 23
requirements applicable to the client or to the covered 24
employees. 25
2. Except as specifically provided under sections 26
285.700 to 285.750, the coemployment relationship between 27
the client and the PEO and between each coemployer and each 28
covered employee shall be governed by the professional 29
40
employer agreement. Each professional employer agreement 30
shall include the following: 31
(1) The allocation of rights, duties, and obligations 32
as described in subsection 1 of this section; 33
(2) A requirement that the PEO shall have 34
responsibility to: 35
(a) Pay wages to covered employees; 36
(b) Withhold, collect, report, and remit payroll - 37
related and unemployment taxes; and 38
(c) To the extent the PEO has assumed responsibility 39
in the professional employer agreement, to make payments for 40
employee benefits for covered employees. 41
As used in this section, the term "wages" does not include 42
any obligation between a client and a covered employee for 43
payments beyond or in addition to the cov ered employee's 44
salary, draw, or regular rate of pay, such as bonuses, 45
commissions, severance pay, deferred compensation, profit 46
sharing, vacation, sick, or other paid -time off pay, unless 47
the PEO has expressly agreed to assume liability for such 48
payments in the professional employer agreement; and 49
(3) A requirement that the PEO shall have a right to 50
hire, discipline, and terminate a covered employee as may be 51
necessary to fulfill the PEO's responsibilities under 52
sections 285.700 to 285.750 an d the professional employer 53
agreement. The client shall have a right to hire, 54
discipline, and terminate a covered employee. 55
3. With respect to each professional employer 56
agreement entered into by a PEO, such PEO shall provide 57
written notice to each covered employee affected by such 58
agreement of the general nature of the coemployment 59
relationship between and among the PEO, the client, and such 60
covered employee. 61
41
4. Except to the extent otherwise expressly provided 62
by the applicable profes sional employer agreement: 63
(1) A client shall be solely responsible for the 64
quality, adequacy, or safety of the goods or services 65
produced or sold in the client's business; 66
(2) A client shall be solely responsible for 67
directing, supervising, training, and controlling the work 68
of the covered employees with respect to the business 69
activities of the client and solely responsible for the 70
acts, errors, or omissions of the covered employees with 71
regard to such activities; 72
(3) A client shall not be liable for the acts, errors, 73
or omissions of a PEO or of any covered employee of the 74
client and a PEO if such covered employee is acting under 75
the express direction and control of the PEO; 76
(4) A PEO shall not be liable for the acts, erro rs, or 77
omissions of a client or of any covered employee of the 78
client if such covered employee is acting under the express 79
direction and control of the client; 80
(5) Nothing in this subsection shall serve to limit 81
any contractual liability or oblig ation specifically 82
provided in the written professional employer agreement; and 83
(6) A covered employee is not, solely as the result of 84
being a covered employee of a PEO, an employee of the PEO 85
for purposes of general liability insurance, fidelity bonds, 86
surety bonds, employer's liability that is not covered by 87
workers' compensation, or liquor liability insurance carried 88
by the PEO unless the covered employees are included by 89
specific reference in the professional employer agreement 90
and applicable prearranged employment contract, insurance 91
contract, or bond. 92
5. A PEO under sections 285.700 to 285.750 is not 93
engaged in the sale of insurance or in acting as a third - 94
42
party administrator by offering, marketing, selling, 95
administering, or pr oviding professional employer services 96
that include services and employee benefit plans for covered 97
employees. A client and a registered professional employer 98
organization shall each be deemed an employer under the laws 99
of this state for purposes of s ponsoring retirement and 100
welfare benefits plans for its covered employees. A fully 101
insured welfare benefit plan sponsored by a registered 102
professional employer organization for the benefit of its 103
covered employees shall be treated for the purposes of state 104
law as a single employer welfare benefit plan. For purposes 105
of sponsoring welfare benefit plans for its eligible covered 106
employees, a registered professional employer organization 107
shall be considered the employer of all of its eligible 108
covered employees, and all eligible covered employees of one 109
or more clients participating in a health benefit plan 110
sponsored by a registered professional employer organization 111
shall be considered employees of such registered 112
professional employer organization . The provisions of this 113
section shall not supersede or preempt any requirements 114
under section 375.014. 115
6. For purposes of this state or any county, 116
municipality, or other political subdivision thereof: 117
(1) Any tax or assessment imposed upo n professional 118
employer services or any business license or other fee that 119
is based upon gross receipts shall allow a deduction from 120
the gross income or receipts of the business derived from 121
performing professional employer services that is equal to 122
that portion of the fee charged to a client that represents 123
the actual cost of wages and salaries, benefits, payroll 124
taxes, withholding, or other assessments paid to or on 125
behalf of a covered employee by the professional employer 126
organization under a pr ofessional employer agreement; 127
43
(2) Any tax assessed or assessment or mandated 128
expenditure on a per -capita or per-employee basis shall be 129
assessed against the client for covered employees and 130
against the professional employer organization for its 131
employees who are not covered employees coemployed with a 132
client. Benefits or monetary consideration that meet the 133
requirements of mandates imposed on a client and that are 134
received by covered employees through the PEO either through 135
payroll or through benefit plans sponsored by the PEO shall 136
be credited against the client's obligation to fulfill such 137
mandates; and 138
(3) In the case of a tax or an assessment imposed or 139
calculated upon the basis of total payroll, the professional 140
employer organization shall be eligible to apply any small 141
business allowance or exemption available to the client for 142
the covered employees for purposes of computing the tax. 143
407.475. 1. Except when specifically required or 1
authorized by federa l law, no state agency or state official 2
shall impose any additional annual filing or reporting 3
requirements on an organization regulated or specifically 4
exempted from regulation under sections 407.450 to 407.478 5
that are more stringent, restrictive, o r expansive than the 6
requirements authorized under section 407.462. 7
2. This section shall not apply to state grants or 8
contracts, nor investigations under section 407.472 and 9
shall not restrict enforcement actions against specific 10
charitable organizations. This section shall not apply to 11
labor organizations, as that term is defined in section 12
105.500. 13
3. This section shall not apply when an organization 14
regulated or specifically exempted from regulation under 15
sections 407.450 to 407.475 is providing any report or 16
44
disclosure required by state law to be filed with the 17
secretary of state. 18
620.3800. There is hereby created within the 1
department of economic development the "Office of 2
Entrepreneurship". The office shall employ an individual to 3
promote policies and initiatives to support the growth of 4
entrepreneurship, including minority entrepreneurship, in 5
the state. The office shall work with stakeholders and 6
communities, including minority communities, to prov ide 7
information and technical support to entrepreneurs. The 8
office shall support and advise the office of administration 9
with preparing the report pursuant to subsection 3 of 10
section 34.195. 11
620.3900. 1. Sections 620.3900 to 620 .3930 shall be 1
known and may be cited as the "Regulatory Sandbox Act". 2
2. For the purposes of sections 620.3900 to 620.3930, 3
the following terms shall mean: 4
(1) "Advisory committee", the general regulatory 5
sandbox program advisory committee created in section 6
620.3910; 7
(2) "Applicable agency", a department or agency of the 8
state that by law regulates a business activity and persons 9
engaged in such business activity, including the issuance of 10
licenses or other types of authorization, and which the 11
regulatory relief office determines would otherwise regulate 12
a sandbox participant. A participant may fall under 13
multiple applicable agencies if multiple agencies regulate 14
the business activity that is subject to the sandbox program 15
application. "Applicable agency" shall not include the 16
division of professional registration and its boards, 17
commissions, committees and offices; 18
(3) "Applicant" or "sandbox applicant", a person or 19
business that applies to participate in the sandbo x program; 20
45
(4) "Consumer", a person who purchases or otherwise 21
enters into a transaction or agreement to receive a product 22
or service offered through the sandbox program pursuant to a 23
demonstration by a program participant; 24
(5) "Demonstrate" or "demonstration", to temporarily 25
provide an offering of an innovative product or service in 26
accordance with the provisions of the sandbox program; 27
(6) "Department", the department of economic 28
development; 29
(7) "Innovation", the use or inco rporation of a new 30
idea, a new or emerging technology, or a new use of existing 31
technology to address a problem, provide a benefit, or 32
otherwise offer a product, production method, or service; 33
(8) "Innovative offering", an offering of a product or 34
service that includes an innovation; 35
(9) "Product", a commercially distributed good that is: 36
(a) Tangible personal property; and 37
(b) The result of a production process; 38
(10) "Production", the method or process of creating 39
or obtaining a good, which may include assembling, breeding, 40
capturing, collecting, extracting, fabricating, farming, 41
fishing, gathering, growing, harvesting, hunting, 42
manufacturing, mining, processing, raising, or trapping a 43
good; 44
(11) "Regulatory relief office", the office 45
responsible for administering the sandbox program within the 46
department; 47
(12) "Sandbox participant" or "participant", a person 48
or business whose application to participate in the sandbox 49
program is approved in accordance wi th the provisions of 50
section 620.3915; 51
(13) "Sandbox program", the general regulatory sandbox 52
program created in sections 620.3900 to 620.3930 that allows 53
46
a person to temporarily demonstrate an innovative offering 54
of a product or service under a waiver or suspension of one 55
or more state laws or regulations; 56
(14) "Sandbox program director", the director of the 57
regulatory relief office; 58
(15) "Service", any commercial activity, duty, or 59
labor performed for another person or business. "Service" 60
shall not include a product or service when its use would 61
impact rates, statutorily authorized service areas, or 62
system safety or reliability of an electrical corporation or 63
gas corporation, as defined in section 386.020, as 64
determined by the public service commission, or of any rural 65
electric cooperative organized or operating under the 66
provisions of chapter 394, or to any corporation organized 67
on a nonprofit or a cooperative basis as described in 68
subsection 1 of section 394.200, or to a ny electrical 69
corporation operating under a cooperative business plan as 70
described in subsection 2 of section 393.110. 71
620.3905. 1. There is hereby created within the 1
department of economic development the "Regulatory Relief 2
Office", which shall be administered by the sandbox program 3
director. The sandbox program director shall report to the 4
director of the department and may appoint staff, subject to 5
the approval of the director of the department. 6
2. The regulatory relief office shall: 7
(1) Administer the sandbox program pursuant to 8
sections 620.3900 to 620.3930; 9
(2) Act as a liaison between private businesses and 10
applicable agencies that regulate such businesses to 11
identify state laws or regulations that c ould potentially be 12
waived or suspended under the sandbox program; 13
(3) Consult with each applicable agency; and 14
47
(4) Establish a program to enable a person to obtain 15
monitored access to the market in the state along with legal 16
protections for a product or service related to the laws or 17
regulations that are being waived as a part of participation 18
in the sandbox program, in order to demonstrate an 19
innovative product or service without obtaining a license or 20
other authorization that might oth erwise be required. 21
3. The regulatory relief office shall: 22
(1) Review state laws and regulations that may 23
unnecessarily inhibit the creation and success of new 24
companies or industries and provide recommendations to the 25
governor and the gener al assembly on modifying or repealing 26
such state laws and regulations; 27
(2) Create a framework for analyzing the risk level of 28
the health, safety, and financial well -being of consumers 29
related to permanently removing or temporarily waiving laws 30
and regulations inhibiting the creation or success of new 31
and existing companies or industries; 32
(3) Propose and enter into reciprocity agreements 33
between states that use or are proposing to use similar 34
regulatory sandbox programs as described in sec tions 35
620.3900 to 620.3930, provided that such reciprocity 36
agreement is supported by a two -thirds majority vote of the 37
advisory committee and the regulatory relief office is 38
directed by an order of the governor to pursue such 39
reciprocity agreement; 40
(4) Enter into agreements with or adopt best practices 41
of corresponding federal regulatory agencies or other states 42
that are administering similar programs; 43
(5) Consult with businesses in the state about 44
existing or potential proposals for the sandbox program; and 45
(6) In accordance with the provisions of chapter 536 46
and the provisions of sections 620.3900 to 620.3930, make 47
48
rules regarding the administration of the sandbox program, 48
including making rules regarding the application proces s and 49
the reporting requirements of sandbox participants. Any 50
rule or portion of a rule, as that term is defined in 51
section 536.010, that is created under the authority 52
delegated in this section shall become effective only if it 53
complies with and is subject to all of the provisions of 54
chapter 536 and, if applicable, section 536.028. This 55
section and chapter 536 are nonseverable, and if any of the 56
powers vested with the general assembly pursuant to chapter 57
536 to review, to delay the effective dat e, or to disapprove 58
and annul a rule are subsequently held unconstitutional, 59
then the grant of rulemaking authority and any rule proposed 60
or adopted after August 28, 2022, shall be invalid and void. 61
4. (1) The regulatory relief office shall creat e and 62
maintain on the department's website a web page that invites 63
residents and businesses in the state to make suggestions 64
regarding laws and regulations that could be modified or 65
eliminated to reduce the regulatory burden on residents and 66
businesses in the state. 67
(2) On at least a quarterly basis, the regulatory 68
relief office shall compile the relevant suggestions from 69
the web page created pursuant to subdivision (1) of this 70
subsection and provide a written report to the governor and 71
the general assembly. 72
(3) In creating the report described in subdivision 73
(2) of this subsection, the regulatory relief office: 74
(a) Shall provide the identity of residents and 75
businesses that make suggestions on the web page if those 76
residents and businesses wish to comment publicly, and shall 77
ensure that the private information of residents and 78
businesses that make suggestions on the web page is not made 79
public if they do not wish to comment publicly; and 80
49
(b) May evaluate the suggestions and provide analysis 81
and suggestions regarding which state laws and regulations 82
could be modified or eliminated to reduce the regulatory 83
burden on residents and businesses in the state while still 84
protecting consumers. 85
5. (1) By October first of each year, the department 86
shall submit an annual report to the governor, the general 87
assembly, and to each state agency which shall include: 88
(a) Information regarding each participant in the 89
sandbox program, including industries represented by e ach 90
participant and the anticipated or actual cost savings that 91
each participant experienced; 92
(b) The anticipated or actual benefit to consumers 93
created by each demonstration in the sandbox program; 94
(c) Recommendations regarding any laws or regulations 95
that should be permanently modified or repealed; 96
(d) Information regarding any health and safety events 97
related to the activities of a participant in the sandbox 98
program; and 99
(e) Recommendations for changes to the sandbox program 100
or other duties of the regulatory relief office. 101
(2) The department may provide an interim report from 102
the sandbox program director to the governor and general 103
assembly on specific, time -sensitive issues for the 104
functioning of the sandbox progra m, for the health and 105
safety of consumers, for the success of participants in the 106
program, and for other issues of urgent need. 107
620.3910. 1. There is hereby created the "General 1
Regulatory Sandbox Program Advisory Committee", to b e 2
composed of the following members: 3
(1) The director of the department of economic 4
development or his or her designee; 5
50
(2) The director of the department of commerce and 6
insurance or his or her designee; 7
(3) The attorney general or hi s or her designee; 8
(4) A member of the public to be appointed by the 9
governor; 10
(5) A member of the public or of an institution of 11
higher education, to be appointed by the governor; 12
(6) A member of an institution of higher education, to 13
be appointed by the director of the department of higher 14
education and workforce development; 15
(7) Two members of the house of representatives, one 16
to be appointed by the speaker of the house of 17
representatives and one to be appointed by the minor ity 18
leader of the house of representatives; 19
(8) Two members of the senate, one to be appointed by 20
the president pro tempore of the senate and one to be 21
appointed by the minority leader of the senate; and 22
(9) An employee of the office of publ ic counsel, to be 23
appointed by the public counsel. 24
2. (1) Advisory committee members shall be appointed 25
to a four-year term. Members who cease holding elective 26
office shall be replaced by the speaker or minority leader 27
of the house of represent atives or the president pro tempore 28
or minority floor leader of the senate, as applicable. The 29
sandbox program director may establish the terms of initial 30
appointments so that approximately half of the advisory 31
committee is appointed every two years. 32
(2) The sandbox program director shall select a chair 33
of the advisory committee every two years in consultation 34
with the members of the advisory committee. 35
(3) No appointee of the governor, speaker of the house 36
of representatives, or preside nt pro tempore of the senate 37
may serve more than two complete terms. 38
51
3. A majority of the advisory committee shall 39
constitute a quorum for the purpose of conducting business, 40
and the action of a majority of a quorum shall constitute 41
the action of the advisory committee, except as provided in 42
subsection 4 of this section. 43
4. The advisory committee may, at its own discretion, 44
meet to override a decision of the regulatory relief office 45
on the admission or denial of an applicant to the sandbo x 46
program, provided such override is decided with a two -thirds 47
majority vote of the members of the advisory committee, and 48
further provided that such vote shall be taken within 49
fifteen business days of the regulatory relief office's 50
decision. 51
5. The advisory committee shall advise and make 52
recommendations to the regulatory relief office on whether 53
to approve applications to the sandbox program pursuant to 54
section 620.3915. 55
6. The regulatory relief office shall provide 56
administrative staff support for the advisory committee. 57
7. The members of the advisory committee shall serve 58
without compensation, but may be reimbursed for any actual 59
and necessary expenses incurred in the performance of the 60
advisory committee's official duties. 61
8. Meetings of the advisory committee shall be 62
considered public meetings for the purposes of chapter 610. 63
However, a meeting of the committee shall be a closed 64
meeting if the purpose of the meeting is to discuss an 65
application for participation in the regulatory sandbox and 66
failing to hold a closed meeting would reveal information 67
that constitutes proprietary or confidential trade secrets. 68
Upon approval by a majority vote by members of the advisory 69
committee, the advisory committee shall be allowed to 70
conduct remote meetings, and individual members shall be 71
52
allowed to attend meetings remotely. The advisory committee 72
shall provide the public the ability to view any such remote 73
meetings. 74
620.3915. 1. An applicant for the sandbox program 1
shall provide to the regulatory relief office an application 2
in a form prescribed by the regulatory relief office that: 3
(1) Confirms the applicant is subject to the 4
jurisdiction of the state; 5
(2) Confirms the applicant has established physical 6
residence or a virtual location in the state from which the 7
demonstration of an innovative offering will be developed 8
and performed, and where all required records, documents, 9
and data will be maintained; 10
(3) Contains relevant personal and contact information 11
for the applicant, including legal names, addresses, 12
telephone numbers, email addresses, website addresses, and 13
other information required by the regulatory relief office; 14
(4) Discloses criminal convictions o f the applicant or 15
other participating personnel, if any; and 16
(5) Contains a description of the innovative offering 17
to be demonstrated, including statements regarding: 18
(a) How the innovative offering is subject to 19
licensing, legal prohibitio n, or other authorization 20
requirements outside of the sandbox program; 21
(b) Each law or regulation that the applicant seeks to 22
have waived or suspended while participating in the sandbox 23
program; 24
(c) How the innovative offering would benefit 25
consumers; 26
(d) How the innovative offering is different from 27
other innovative offerings available in the state; 28
(e) The risks that might exist for consumers who use 29
or purchase the innovative offering; 30
53
(f) How participating in the sand box program would 31
enable a successful demonstration of the innovative offering 32
of an innovative product or service; 33
(g) A description of the proposed demonstration plan, 34
including estimated time periods for beginning and ending 35
the demonstration; 36
(h) Recognition that the applicant will be subject to 37
all laws and regulations pertaining to the applicant's 38
innovative offering after the conclusion of the 39
demonstration; 40
(i) How the applicant will end the demonstration and 41
protect consumers if the demonstration fails; 42
(j) A list of each applicable agency, if any, that the 43
applicant knows regulates the applicant's business; and 44
(k) Any other required information as determined by 45
the regulatory relief office. 46
2. An applicant shall remit to the regulatory relief 47
office an application fee of three hundred dollars per 48
application for each innovative offering. Such application 49
fees shall be used by the regulatory relief office solely 50
for the purpose of implementing the p rovisions of sections 51
620.3900 to 620.3930. 52
3. An applicant shall file a separate application for 53
each innovative offering that the applicant wishes to 54
demonstrate. 55
4. An applicant for the sandbox program may contact 56
the regulatory relief o ffice to request a consultation 57
regarding the sandbox program before submitting an 58
application. The regulatory relief office may provide 59
assistance to an applicant in preparing an application for 60
submission. 61
5. (1) After an application is filed , the regulatory 62
relief office shall: 63
54
(a) Consult with each applicable agency that regulates 64
the applicant's business regarding whether more information 65
is needed from the applicant; and 66
(b) Seek additional information from the applicant 67
that the regulatory relief office determines is necessary. 68
(2) No later than fifteen business days after the day 69
on which a completed application is received by the 70
regulatory relief office, the regulatory relief office shall: 71
(a) Review the application and refer the application 72
to each applicable agency that regulates the applicant's 73
business; and 74
(b) Provide to the applicant: 75
a. An acknowledgment of receipt of the application; and 76
b. The identity and contact information of each 77
applicable agency to which the application has been referred 78
for review. 79
(3) No later than forty-five days after the day on 80
which an applicable agency receives a completed application 81
for review, the applicable agency shall provide a written 82
report to the sandbox program director with the applicable 83
agency's findings. Such report shall: 84
(a) Describe any identifiable, likely, and significant 85
harm to the health, safety, or financial well -being of 86
consumers that the relevant law or re gulation protects 87
against; and 88
(b) Make a recommendation to the regulatory relief 89
office that the applicant either be admitted or denied 90
entrance into the sandbox program. 91
(4) An applicable agency may request an additional ten 92
business days to deliver the written report required by 93
subdivision (3) of this subsection by providing notice to 94
the sandbox program director, which request shall 95
automatically be granted. An applicable agency may request 96
55
only one extension per application. The sandbox program 97
director may also provide an additional extension to the 98
applicable agency for cause. 99
(5) If an applicable agency recommends an applicant 100
under this section be denied entrance into the sandbox 101
program, the written report required by subdivision (3) of 102
this subsection shall include a description of the reasons 103
for such recommendation, including the reason a temporary 104
waiver or suspension of the relevant laws or regulations 105
would potentially significantly harm the health, safety, or 106
financial well-being of consumers or the public and the 107
assessed likelihood of such harm occurring. 108
(6) If an applicable agency determines that the 109
consumer's or public's health, safety, or financial well - 110
being can be protected through less r estrictive means than 111
the existing relevant laws or regulations, the applicable 112
agency shall provide a recommendation of how that can be 113
achieved. 114
(7) If an applicable agency fails to deliver the 115
written report required by subdivision (3) of this 116
subsection, the sandbox program director shall provide a 117
final notice to the applicable agency for delivery of the 118
written report. If the report is not delivered within five 119
days of such final notice, the sandbox program director 120
shall assume that the applicable agency does not object to 121
the temporary waiver or suspension of the relevant laws or 122
regulations for an applicant seeking to participate in the 123
sandbox program. 124
6. (1) Notwithstanding any provision of this section 125
to the contrary, an applicable agency may, by written notice 126
to the regulatory relief office: 127
(a) Reject an application, provided such rejection 128
occurs within forty-five days after the day on which the 129
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applicable agency receives a complete application for 130
review, or within fifty days if an extension has been 131
requested by the applicable agency, if the applicable agency 132
determines, in the applicable agency's sole discretion, that 133
the applicant's offering fails to comply with standards or 134
specifications: 135
a. Required by federal rule or regulation; or 136
b. Previously approved for use by a federal agency; or 137
(b) Reject an application preliminarily approved by 138
the regulatory relief office, if the applicable agency: 139
a. Recommends rejection of the application in the 140
applicable agency's written report submitted pursuant to 141
subdivision (3) of subsection 5 of this section; and 142
b. Provides in the written report submitted pursuant 143
to subdivision (3) of subsection 5 of this section a 144
description of the applicable agency's reasons approval of 145
the application would create a substantial risk of harm to 146
the health or safety of the public, or create unreasonable 147
expenses for taxpayers in the state. 148
(2) If any applicable agency rejects an app lication on 149
a nonpreliminary basis pursuant to subdivision (1) of this 150
subsection, the regulatory relief office shall not approve 151
the application. 152
7. (1) The sandbox program director shall provide all 153
applications and associated written reports to the advisory 154
committee upon receiving a written report from an applicable 155
agency. 156
(2) The sandbox program director may call the advisory 157
committee to meet as needed, but not less than once per 158
quarter if applications are available for review. 159
(3) After receiving and reviewing the application and 160
each associated written report, the advisory committee shall 161
provide to the sandbox program director the advisory 162
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committee's recommendation as to whether the applicant 163
should be admitted as a sandbox participant. 164
(4) As part of the advisory committee's review of each 165
report, the advisory committee shall use criteria used by 166
applicable agencies to evaluate applications. 167
8. The regulatory relief office shall consult with 168
each applicable agency and the advisory committee before 169
admitting an applicant into the sandbox program. Such 170
consultation may include seeking information about whether: 171
(1) The applicable agency has previously issued a 172
license or other authorization to the applicant; and 173
(2) The applicable agency has previously investigated, 174
sanctioned, or pursued legal action against the applicant. 175
9. In reviewing an application under this section, the 176
regulatory relief office and applicable agencies shall 177
consider whether: 178
(1) A competitor to the applicant is or has been a 179
sandbox participant and, if so, weigh that as a factor in 180
favor of allowing the applicant to also become a sandbox 181
participant; 182
(2) The applicant's plan will adequately p rotect 183
consumers from potential harm identified by an applicable 184
agency in the applicable agency's written report; 185
(3) The risk of harm to consumers is outweighed by the 186
potential benefits to consumers from the applicant's 187
participation in the sa ndbox program; and 188
(4) Certain state laws or regulations that regulate an 189
innovative offering should not be waived or suspended even 190
if the applicant is approved as a sandbox participant, 191
including applicable anti -fraud or disclosure provisions. 192
10. An applicant shall become a sandbox participant if 193
the regulatory relief office approves the application for 194
the sandbox program and enters into a written agreement with 195
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the applicant describing the specific laws and regulations 196
that are waived or suspended as part of participation in the 197
sandbox program. Notwithstanding any other provision of 198
this section to the contrary, the regulatory relief office 199
shall not enter into a written agreement with an applicant 200
that exempts the applicant fro m any income, property, or 201
sales tax liability unless such applicant otherwise 202
qualifies for an exemption from such tax. 203
11. (1) The sandbox program director may deny at his 204
or her sole discretion any application submitted under this 205
section for any reason, including if the sandbox program 206
director determines that the preponderance of evidence 207
demonstrates that suspending or waiving enforcement of a law 208
or regulation would cause significant risk of harm to 209
consumers or residents of the state. 210
(2) If the sandbox program director denies an 211
application submitted under this section, the regulatory 212
relief office shall provide to the applicant a written 213
description of the reasons for not allowing the applicant to 214
become a sandbox participa nt. 215
(3) The denial of an application submitted under this 216
section shall not be subject to judicial or administrative 217
review. 218
(4) The acceptance or denial of an application 219
submitted under this section may be overridden by an 220
affirmative vote of a two-thirds majority of the advisory 221
committee at the discretion of the advisory committee, 222
provided such vote shall take place within fifteen business 223
days of the sandbox program director's decision. 224
Notwithstanding any other provision of this section to the 225
contrary, the advisory committee shall not override a 226
rejection made by an applicable agency. 227
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(5) The sandbox program director shall deny an 228
application for participation in the sandbox program if the 229
applicant or any person who se eks to participate with the 230
applicant in demonstrating an innovative offering has been 231
convicted, entered into a plea of nolo contendere, or 232
entered a plea of guilty or nolo contendere held in 233
abeyance, for any crime involving significant theft, fraud, 234
or dishonesty if the crime bears a significant relationship 235
to the applicant's or other participant's ability to safely 236
and competently participate in the sandbox program. 237
12. When an applicant is approved for participation in 238
the sandbox program, the sandbox program director may 239
provide notice of the approval to competitors of the 240
applicant and to the general public. 241
13. Applications to participate in the sandbox program 242
shall be considered public records for the purposes of 243
chapter 610, provided, however, that any information 244
contained in such applications that constitutes proprietary 245
or confidential trade secrets shall not be subject to 246
disclosure pursuant to chapter 610. 247
620.3920. 1. If the regulatory relief office approves 1
an application pursuant to section 620.3915, the sandbox 2
participant shall have twenty -four months after the day on 3
which the application was approved to demonstrate the 4
innovative offering described in the sandbox participant's 5
application. 6
2. An innovative offering that is demonstrated within 7
the sandbox program shall only be available to consumers who 8
are residents of Missouri or of another state. No law or 9
regulation shall be waived or suspended if waiving or 10
suspending such law or regulation would prevent a consumer 11
from seeking restitution in the event that the consumer is 12
harmed. 13
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3. Nothing in sections 620.3900 to 620.3930 shall 14
restrict a sandbox participant that holds a license or other 15
authorization in ano ther jurisdiction from acting in 16
accordance with such license or other authorization in that 17
jurisdiction. 18
4. A sandbox participant shall be deemed to possess an 19
appropriate license or other authorization under the laws of 20
this state for the purp oses of any provision of federal law 21
requiring licensure or other authorization by the state. 22
5. (1) During the demonstration period, a sandbox 23
participant shall not be subject to the enforcement of state 24
laws or regulations identified in the wri tten agreement 25
between the regulatory relief office and the sandbox 26
participant. 27
(2) A prosecutor shall not file or pursue charges 28
pertaining to any action related to a law or regulation 29
identified in the written agreement between the regulatory 30
relief office and the sandbox participant that occurs during 31
the demonstration period. 32
(3) A state agency shall not file or pursue any 33
punitive action against a sandbox participant, including a 34
fine or license suspension or revocation, for the vi olation 35
of a law or regulation that is identified as being waived or 36
suspended in the written agreement between the regulatory 37
relief office and the sandbox participant that occurs during 38
the demonstration period. 39
6. Notwithstanding any provision of this section to 40
the contrary, a sandbox participant shall not have immunity 41
related to any criminal offense committed during the sandbox 42
participant's participation in the sandbox program. 43
7. By written notice, the regulatory relief office may 44
end a sandbox participant's participation in the sandbox 45
program at any time and for any reason, including if the 46
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sandbox program director determines that a sandbox 47
participant is not operating in good faith to bring an 48
innovative offering to market; provided, however, that the 49
sandbox program director's decision may be overridden by an 50
affirmative vote of a two -thirds majority of the members of 51
the advisory committee. 52
8. The regulatory relief office and regulatory relief 53
office's employees shall not be liable for any business 54
losses or the recouping of application expenses or other 55
expenses related to the sandbox program, including for: 56
(1) Denying an applicant's application to participate 57
in the sandbox program for any reason; or 58
(2) Ending a sandbox participant's participation in 59
the sandbox program at any time and for any reason. 60
620.3925. 1. Before demonstrating an innovative 1
offering to a consumer, a sandbox participant shall disclose 2
the following information to the consumer: 3
(1) The name and contact information of the sandbox 4
participant; 5
(2) A statement that the innovative offering is 6
authorized pursuant to the sandbox program and, if 7
applicable, that the sandbox participant does not have a 8
license or other authorization to provide an innovative 9
offering under state laws that regulate offerings outside of 10
the sandbox program; 11
(3) A statement that specific laws and regulations 12
have been waived for the sandbox participant f or the 13
duration of its demonstration in the sandbox program, with a 14
summary of such waived laws and regulations; 15
(4) A statement that the innovative offering is 16
undergoing testing and may not function as intended and may 17
expose the consumer to ce rtain risks as identified by the 18
applicable agency's written report; 19
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(5) A statement that the provider of the innovative 20
offering is not immune from civil liability for any losses 21
or damages caused by the innovative offering; 22
(6) A statement that the provider of the innovative 23
offering is not immune from criminal prosecution for 24
violations of state law or regulations that are not 25
suspended or waived as allowed within the sandbox program; 26
(7) A statement that the innovative offering i s a 27
temporary demonstration that may be discontinued at the end 28
of the demonstration period; 29
(8) The expected end date of the demonstration period; 30
and 31
(9) A statement that a consumer may contact the 32
regulatory relief office and file a comp laint regarding the 33
innovative offering being demonstrated, providing the 34
regulatory relief office's telephone number, email address, 35
and website address where a complaint may be filed. 36
2. The disclosures required by subsection 1 of this 37
section shall be provided to a consumer in a clear and 38
conspicuous form and, for an internet - or application-based 39
innovative offering, a consumer shall acknowledge receipt of 40
the disclosure before any transaction may be completed. 41
3. The regulatory relie f office may require that a 42
sandbox participant make additional disclosures to a 43
consumer. 44
620.3930. 1. At least forty-five days before the end 1
of the twenty-four-month demonstration period, a sandbox 2
participant shall: 3
(1) Notify the regulatory relief office that the 4
sandbox participant will exit the sandbox program and 5
discontinue the sandbox participant's demonstration after 6
the day on which the twenty -four-month demonstration period 7
ends; or 8
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(2) Seek an extension pursuant to subsection 4 of this 9
section. 10
2. If the regulatory relief office does not receive 11
notification as required by subsection 1 of this section, 12
the demonstration period shall end at the end of the twenty - 13
four-month demonstration period . 14
3. If a demonstration includes an innovative offering 15
that requires ongoing services or duties beyond the twenty - 16
four-month demonstration period, the sandbox participant may 17
continue to demonstrate the innovative offering but shall be 18
subject to enforcement of the laws or regulations that were 19
waived or suspended as part of the sandbox program. 20
4. (1) No later than forty-five days before the end 21
of the twenty-four-month demonstration period, a sandbox 22
participant may request an extensi on of the demonstration 23
period. 24
(2) The regulatory relief office shall grant or deny a 25
request for an extension by the end of the twenty -four month 26
demonstration period. 27
(3) The regulatory relief office may grant an 28
extension for not more t han twelve months after the end of 29
the demonstration period. 30
(4) Sandbox participants may apply for additional 31
extensions in accordance with the criteria used to assess 32
their initial application, up to a cumulative maximum of 33
seven years inclusiv e of the original twenty -four-month 34
demonstration period. 35
5. (1) A sandbox participant shall retain records, 36
documents, and data produced in the ordinary course of 37
business regarding an innovative offering demonstrated in 38
the sandbox program for twenty-four months after exiting the 39
sandbox program. 40
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(2) The regulatory relief office may request relevant 41
records, documents, and data from a sandbox participant, 42
and, upon the regulatory relief office's request, the 43
sandbox participant shall make such records, documents, and 44
data available for inspection by the regulatory relief 45
office. 46
6. If a sandbox participant ceases to provide an 47
innovative offering before the end of a demonstration 48
period, the sandbox participant shall notify t he regulatory 49
relief office and each applicable agency and report on 50
actions taken by the sandbox participant to ensure consumers 51
have not been harmed as a result. 52
7. The regulatory relief office shall establish 53
quarterly reporting requirements f or each sandbox 54
participant, including information about any consumer 55
complaints. 56
8. (1) The sandbox participant shall notify the 57
regulatory relief office and each applicable agency of any 58
incidents that result in harm to the health, safety, or 59
financial well-being of a consumer. The parameters for such 60
incidents that shall be reported shall be laid out in the 61
written agreement between the applicant and the regulatory 62
relief office. Any incident reports shall be publicly 63
available on the regulatory sandbox webpage provided, 64
however, that any information contained in such reports that 65
constitutes proprietary or confidential trade secrets shall 66
not be subject to disclosure pursuant to chapter 610. 67
(2) If a sandbox participant fails t o notify the 68
regulatory relief office and each applicable agency of any 69
incidents required to be reported, or the regulatory relief 70
office or an applicable agency has evidence that significant 71
harm to a consumer has occurred, the regulatory relief 72
65
office may immediately remove the sandbox participant from 73
the sandbox program. 74
9. No later than thirty days after the day on which a 75
sandbox participant exits the sandbox program, the sandbox 76
participant shall submit a written report to the regulato ry 77
relief office and each applicable agency describing an 78
overview of the sandbox participant's demonstration. 79
Failure to submit such a report shall result in the sandbox 80
participant and any entity that later employs a member of 81
the leadership team o f the sandbox participant being 82
prohibited from future participation in the sandbox 83
program. Such report shall include any: 84
(1) Incidents of harm to consumers; 85
(2) Legal action filed against the sandbox participant 86
as a result of the partic ipant's demonstration; or 87
(3) Complaint filed with an applicable agency as a 88
result of the sandbox participant's demonstration. 89
Any incident reports of harm to consumers, legal actions 90
filed against a sandbox participant, or complaints filed 91
with an applicable agency shall be compiled and made 92
publicly available on the regulatory sandbox webpage 93
provided, however, that any information contained in such 94
reports or complaints that constitutes proprietary or 95
confidential trade secrets shall not be subject to 96
disclosure pursuant to chapter 610. 97
10. No later than thirty days after the day on which 98
an applicable agency receives the quarterly report required 99
by subsection 7 of this section or a written report from a 100
sandbox participant as req uired by subsection 9 of this 101
section, the applicable agency shall provide a written 102
report to the regulatory relief office on the demonstration, 103
which describes any statutory or regulatory reform the 104
66
applicable agency recommends as a result of the 105
demonstration. 106
11. The regulatory relief office may remove a sandbox 107
participant from the sandbox program at any time if the 108
regulatory relief office determines that a sandbox 109
participant has engaged in, is engaging in, or is about to 110
engage in any practice or transaction that is in violation 111
of sections 620.3900 to 620.3930 or that constitutes a 112
violation of a law or regulation for which suspension or 113
waiver has not been granted pursuant to the sandbox 114
program. Information on any removal of a sandbox 115
participant for engaging in any practice or transaction that 116
constitutes a violation of law or regulation for which 117
suspension or waiver has not been granted pursuant to the 118
sandbox program shall be made publicly available on the 119
regulatory sandbox webpage provided, however, that any 120
information that constitutes proprietary or confidential 121
trade secrets shall not be subject to disclosure pursuant to 122
chapter 610. 123