SECONDREGULARSESSION
HOUSEBILLNO.2764
101STGENERALASSEMBLY
INTRODUCEDBYREPRESENTATIVEJOHNSON.
5655H.01I DANARADEMANMILLER,ChiefClerk
ANACT
Toamendchapters143and443,RSMo,byaddingtheretosevennewsectionsrelatingtothe
first-timebusinessownersavingsaccountact.
BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
SectionA.Chapters143and443,RSMo,areamendedbyaddingtheretosevennew
2sections,tobeknownassections143.1155,443.1011,443.1013,443.1014,443.1015,
3443.1016,and443.1017,toreadasfollows:
143.1155.1.Thissectionshallbeknownandmaybecitedasthe"First-Time
2BusinessOwnerTaxDeduction".
3 2.Asusedinthissection,thefollowingtermsmean:
4 (1)"Deduction",anamountsubtractedfromthetaxpayer'sMissouriadjusted
5grossincometodetermineMissouritaxableincomeforthetaxyearinwhichsuch
6deductionisclaimed;
7 (2)"Eligibleexpenses",thesamemeaningasthattermisdefinedunder
8subdivision(3)ofsection443.1013;
9 (3)"First-timebusinessownersavingsaccount",thesamemeaningasthatterm
10isdefinedundersubdivision(6)ofsection443.1013;
11 (4)"First-timebusinessownersavingsaccountact",sections443.1011to
12443.1017;
13 (5)"Taxpayer",anyindividualwhoisaresidentofthisstateandsubjecttothe
14incometaximposedunderthischapter,excludingwithholdingtaximposedunder
15sections143.191to143.265.
EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 16 3.ForalltaxyearsbeginningonorafterJanuary1,2023,ataxpayershallbe
17allowedadeductionequaltofiftypercentofthetaxpayer'scontributionstoafirst-time
18businessownersavingsaccountinthetaxyearofthecontribution.
19 4.Theamountofthedeductionclaimedshallnotexceedtheamountofthe
20taxpayer'sMissouriadjustedgrossincomeforthetaxyearthedeductionisclaimed.
21 5.Theassetsofafirst-timebusinessownersavingsaccountandanyincome
22therefromshallbeexemptfromalltaxationbythestateoranyofitspolitical
23subdivisions.Incomeearnedorreceivedasaresultofassetsinafirst-timebusiness
24ownersavingsaccountshallnotbesubjecttostateincometaximposedunderchapter
25143.Theexemptionfromtaxationunderthissectionshallapplyonlytoassetsand
26incomemaintained,accrued,orexpendedundertherequirementsofthefirst-time
27businessownersavingsaccountact,andnoexemptionshallapplytoassetsandincome
28expendedforanyotherpurposes.Annualcontributionsmadetothesavingsprogram,
29uptoandincludingeighthundreddollarsperparticipatingtaxpayeroruptoand
30includingonethousandsixhundreddollarsformarriedindividualsfilingacombined
31taxreturn,shallbesubtractedfromgrossincometodetermineMissouriadjustedgross
32incomeundersection143.121.
33 6.Ifanydeductiblecontributionstoorearningsfromtheprogramreferredtoin
34thissectionaredistributedandnotusedtopayforeligibleexpensesorarenotheldfor
35theminimumlengthoftimeundersubsection2ofsection443.1015,theamountso
36distributedshallbeaddedtotheMissouriadjustedgrossincomeoftheparticipantor,if
37theparticipantisnotliving,theamountshallbeaddedtotheMissouriadjustedgross
38incomeoftheparticipant'sbeneficiary.
39 7.Thedepartmentofrevenueshallpromulgaterulestoimplementthe
40provisionsofthissection.Anyruleorportionofarule,asthattermisdefinedinsection
41536.010,thatiscreatedundertheauthoritydelegatedinthissectionshallbecome
42effectiveonlyifitcomplieswithandissubjecttoalloftheprovisionsofchapter536and,
43ifapplicable,section536.028.Thissectionandchapter536arenonseverable,andifany
44ofthepowersvestedwiththegeneralassemblypursuanttochapter536toreview,to
45delaytheeffectivedate,ortodisapproveandannularulearesubsequentlyheld
46unconstitutional,thenthegrantofrulemakingauthorityandanyruleproposedor
47adoptedafterAugust28,2022,shallbeinvalidandvoid.
48 8.Undersection23.253oftheMissourisunsetact:
49 (1)Theprovisionsofthenewprogramauthorizedunderthissectionshall
50automaticallysunsetonDecemberthirty-firstsixyearsaftertheeffectivedateofthis
51sectionunlessreauthorizedbyanactofthegeneralassembly;
HB2764 2 52 (2)Ifsuchprogramisreauthorized,theprogramauthorizedunderthissection
53shallautomaticallysunsetonDecemberthirty-firstsixyearsaftertheeffectivedateof
54thereauthorizationofthissection;and
55 (3)ThissectionshallterminateonSeptemberfirstofthecalendaryear
56immediatelyfollowingthecalendaryearinwhichtheprogramauthorizedunderthis
57sectionissunset.
443.1011.Sections443.1011to443.1017shallbeknownandmaybecitedasthe
2"First-TimeBusinessOwnerSavingsAccountAct".
443.1013.Asusedinsections443.1011to443.1017,thefollowingtermsmean:
2 (1)"Accountholder",anindividualwhoestablishesanaccountwithafinancial
3institutionthatisdesignatedasafirst-timebusinessownersavingsaccountin
4accordancewithsection443.1014;
5 (2)"Department",thedepartmentofrevenue;
6 (3)"Eligibleexpenses",anybusinessexpensesthatresultfromthestart-upofa
7newbusinessorthatoccurduringthefirstmonthofanewbusinessincluding,butnot
8limitedto,incorporationfees;legalfees;marketingexpenses;purchasesofequipment,
9inventory,realestate,orsupplies;rent;securitydeposits;vehicles;orwagesof
10employees;
11 (4)"Financialinstitution",anystatebank,statetrustcompany,savingsandloan
12association,federallycharteredcredituniondoingbusinessinthisstate,creditunion
13charteredbythestateofMissouri,nationalbank,broker-dealer,mutualfund,insurance
14company,orothersimilarfinancialentityqualifiedtodobusinessinthisstate;
15 (5)"First-timebusinessowner",anindividualwho:
16 (a)Eitherindividuallyorjointly,hasneverowned,beenapartnerin,orheldthe
17majorityofsharesinasoleproprietorship,partnership,corporation,orlimitedliability
18company;and
19 (b)Isamemberofaminority;
20 (6)"First-timebusinessownersavingsaccount"or"account",anaccountwitha
21financialinstitutiondesignatedassuchinaccordancewithsubsection1ofsection
22443.1014;
23 (7)"Memberofaminority",anyindividualwhohasbeensubjectedtoracialor
24ethnicprejudiceorculturalbiasbecauseofhisorheridentityasamemberofagroup
25withoutregardtohisorherindividualqualities.Suchgroupsshallinclude,butnotbe
26limitedto,groupsbasedonrace,color,religion,sex,ornationalorigin;
27 (8)"Qualifiedbeneficiary",afirst-timebusinessowner,designatedbyan
28accountholder,forwhoseeligibleexpensesthemoneysinafirst-timebusinessowner
29savingsaccountareorwillbeused.
HB2764 3 443.1014.1.BeginningJanuary1,2023,anyindividualmayopenanaccount
2withafinancialinstitutionanddesignatetheaccount,initsentirety,asafirst-time
3businessownersavingsaccounttobeusedtopayorreimburseaqualifiedbeneficiary's
4eligibleexpensesforstartinganewbusiness.Anindividualmaybetheaccountholder
5ofmultipleaccounts,andanindividualmayjointlyowntheaccountwithanother
6personifsuchpersonsfileajointincometaxreturn.Tobeeligibleforthetaxdeduction
7undersection143.1155,anaccountholdershallcomplywiththerequirementsofthis
8section.
9 2.Anaccountholdershalldesignate,notlaterthanAprilfifteenthoftheyear
10followingthetaxyearinwhichtheaccountwasestablished,afirst-timebusinessowner
11asthequalifiedbeneficiaryofthefirst-timebusinessownersavingsaccount.The
12accountholdermaydesignatehimselforherselfasthequalifiedbeneficiary.The
13accountholdermaychangethedesignatedqualifiedbeneficiaryatanytime,butno
14first-timebusinessownersavingsaccountshallhavemorethanonequalifiedbeneficiary
15atanytime.Noaccountholdershallhavemultipleaccountswiththesamequalified
16beneficiary,butanindividualmaybedesignatedasthequalifiedbeneficiaryofmultiple
17accounts.
18 3.(1)Thefollowinglimitsapplytoafirst-timebusinessownersavingsaccount:
19 (a)Themaximumcontributiontoafirst-timebusinessownersavingsaccountis
20onethousandsixhundreddollarsperyearforanindividualandthreethousandtwo
21hundreddollarsperyearforaccountholderswhofileajointtaxreturn;
22 (b)Themaximumamountofallcontributionsforalltaxyearstoafirst-time
23businessownersavingsaccountistwentythousanddollars;and
24 (c)Themaximumbalanceofafirst-timebusinessownersavingsaccountis
25thirtythousanddollars.
26 (2)Ifalimitinsubdivision(1)ofthissubsectionisexceeded,thereafterno
27interestorotherincomeearnedontheinvestmentofmoneysinthefirst-timebusiness
28ownersavingsaccountshallbeincludedinthetaxdeductionundersection143.1155.
29 (3)Moneysmayremaininafirst-timebusinessownersavingsaccountforan
30unlimiteddurationwithouttheinterestorincomebeingsubjecttorecaptureorpenalty.
31 4.Theaccountholdershallnotusemoneysinanaccounttopayexpensesof
32administeringtheaccount,exceptthataservicefeemaybedeductedfromtheaccount
33byafinancialinstitution.Theaccountholdershallberesponsibleformaintaining
34documentationforthefirst-timebusinessownersavingsaccountandforeligible
35expensesrelatedtothequalifiedbeneficiarystartinganewbusiness.
HB2764 4 443.1015.1.(1)Forpurposesofthetaxbenefitconferredunderthefirst-time
2businessownersavingsaccountact,themoneysinafirst-timebusinessownersavings
3accountmaybe:
4 (a)Usedforeligibleexpensesrelatedtoaqualifiedbeneficiarystartinganew
5businesslocatedinthisstate;
6 (b)Usedforeligibleexpensesrelatedtoaqualifiedbeneficiarystartinganew
7businesslocatedoutsidethisstateifthequalifiedbeneficiaryisactive-dutymilitaryand
8wasstationedinMissouriforanytimeafterthecreationoftheaccount;
9 (c)Transferredtoanothernewlycreatedfirst-timebusinessownersavings
10account;and
11 (d)Usedtopayaservicefeethatisdeductedbythefinancialinstitution.
12 (2)Subdivision(1)ofthissubsectionapplieswhetherthequalifiedbeneficiaryis
13thesoleownerofthenewbusinessorajointownerwithanotherpersonwhodoesnot
14qualifyasaqualifiedbeneficiary.
15 2.Moneyswithdrawnfromafirst-timebusinessownersavingsaccountshallbe
16subjecttorecaptureinthetaxyearinwhichsuchmoneysarewithdrawnif:
17 (1)Atthetimeofthewithdrawal,ithasbeenlessthanayearsincethefirst
18depositinthefirst-timebusinessownersavingsaccount;or
19 (2)Themoneysareusedforanypurposeotherthanthosespecifiedunder
20subsection1ofthissection.
21
22Therecaptureshallbeanamountequaltothemoneyswithdrawnandshallbeaddedto
23theMissouriadjustedgrossincomeoftheaccountholderor,iftheaccountholderisnot
24living,thequalifiedbeneficiary.
25 3.Ifanymoneysaresubjecttorecaptureundersubsection2ofthissection,the
26accountholdershallpaytothedepartmentapenaltyinthesametaxyearasthe
27recapture.Ifthewithdrawalwasmadetenorfeweryearsafterthefirstdepositinthe
28first-timebusinessownersavingsaccount,thepenaltyshallbeequaltofivepercentof
29theamountsubjecttorecapture,and,ifthewithdrawalwasmademorethantenyears
30afterthefirstdepositintheaccount,thepenaltyshallbeequaltotenpercentofthe
31amountsubjecttorecapture.Thesepenaltiesshallnotapplyif:
32 (1)Thewithdrawnmoneysareusedforeligibleexpensesrelatedtoaqualified
33beneficiarystartinganewbusinessoutsideofthestate;or
34 (2)Thewithdrawnmoneysarefromafirst-timebusinessownersavingsaccount
35forwhichthequalifiedbeneficiarydiedandtheaccountholderdoesnotdesignateanew
36qualifiedbeneficiaryduringthesametaxyear.
HB2764 5 37 4.Iftheaccountholderdiesor,ifthefirst-timebusinessownersavingsaccountis
38jointlyowned,theaccountholdersdieandtheaccountdoesnothaveasurviving
39transfer-on-deathbeneficiary,allofthemoneysintheaccountthatwereusedforatax
40deductionundersection143.1155shallbesubjecttorecaptureinthetaxyearofthe
41deathordeaths,butnopenaltyshallbeduetothedepartment.
443.1016.1.Thedepartmentshallestablishformsforanaccountholderto
2annuallyreportinformationaboutafirst-timebusinessownersavingsaccount
3including,butnotlimitedto,howthemoneyswithdrawnfromthefundareused,and
4shallidentifyanysupportingdocumentationthatisrequiredtobemaintained.Tobe
5eligibleforthetaxdeductionundersection143.1155,anaccountholdershallannually
6filewiththeaccountholder'sstateincometaxreturnallformsrequiredbythe
7departmentunderthissection,anyInternalRevenueServiceForm1099Seriesforms
8fortheaccountissuedbythefinancialinstitution,andanyothersupporting
9documentationthedepartmentrequires.
10 2.Thedepartmentmaypromulgaterulesandregulationsnecessaryto
11administertheprovisionsofthefirst-timebusinessownersavingsaccountact.Any
12ruleorportionofarule,asthattermisdefinedinsection536.010,thatiscreatedunder
13theauthoritydelegatedinthissectionshallbecomeeffectiveonlyifitcomplieswithand
14issubjecttoalloftheprovisionsofchapter536and,ifapplicable,section536.028.This
15sectionandchapter536arenonseverable,andifanyofthepowersvestedwiththe
16generalassemblypursuanttochapter536toreview,todelaytheeffectivedate,orto
17disapproveandannularulearesubsequentlyheldunconstitutional,thenthegrantof
18rulemakingauthorityandanyruleproposedoradoptedafterAugust28,2022,shallbe
19invalidandvoid.
443.1017.1.Nofinancialinstitutionshallberequiredto:
2 (1)Designateanaccountasafirst-timebusinessownersavingsaccountor
3designatethebeneficiariesofanaccountinthefinancialinstitution'saccountcontracts
4orsystemsorinanyotherway;
5 (2)Tracktheuseofmoneyswithdrawnfromafirst-timebusinessownersavings
6account;or
7 (3)Reportanyinformationtothedepartmentoranyothergovernmentalagency
8thatisnototherwiserequiredbylaw.
9 2.Nofinancialinstitutionshallberesponsibleorliablefor:
10 (1)Determiningorensuringthatanaccountholderiseligibleforataxdeduction
11undersection143.1155;
12 (2)Determiningorensuringthatmoneysintheaccountareusedforeligible
13expenses;or
HB2764 6 14 (3)Reportingorremittingtaxesorpenaltiesrelatedtouseofmoneysinafirst-
15timebusinessownersavingsaccount.
16 3.Inimplementingsection143.1155andsections443.1011to443.1017,the
17departmentshallnotestablishanyadministrative,reporting,orotherrequirementson
18financialinstitutionsthatareoutsidethescopeofnormalaccountprocedures.
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HB2764 7