COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:2087H.01I Bill No.:HB 1263 Subject:Emergencies; Business and Commerce; Fees; Taxation and Revenue - General;
Taxation and Revenue - Property
Type:Original Date:March 7, 2023Bill Summary:This proposal changes the law regarding businesses closed because of a
shutdown order.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on General
Revenue $0$0$0
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on Other State
Funds $0$0$0
Numbers within parentheses: () indicate costs or losses. L.R. No. 2087H.01I
Bill No. HB 1263
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on FTE 000
☐ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Local Government$0 or (Unknown)$0 or (Unknown)$0 or (Unknown) L.R. No. 2087H.01I
Bill No. HB 1263
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FISCAL ANALYSIS
ASSUMPTION
Section 44.251 "Protecting Missouri's Small Businesses Act".
Officials from the Office of Administration - Budget and Planning (B&P) note this proposal
would require a reduction of fees, personal property tax, and real property tax in political
subdivisions with shutdown orders. Qualifying shut down orders must be made in response to a
state of emergency declared by the Governor.
Beginning January 1, 2024, any political subdivision with a shutdown order that lasts for at least
21 consecutive days or 45 cumulative days must:
longer.
was closed due to the shutdown order.
This proposal would not:
subdivision.
For shutdown orders that end before June 1
st
, the county assessor must reduce the property tax
liability for all real and personal property located within the boundaries of the shutdown order.
The reduction shall be based on the number of days a business was closed due to the shutdown
order. Affected taxpayers must then pay the reduced tax amount by December 31
st
.
For shutdown orders that end on or after June 1
st
, the taxpayer must pay the full property tax
liability by December 31
st
. The county assessor must then provide information on how such
taxpayer may apply for a refund. The taxpayer must apply for a tax refund by January 15
th
. The
county assessor must then calculate the allowable refund amount by February 15
th
and pay all
refund claims by March 15
th
.
B&P notes that Section 44.251.4(2) requires business owners that rent or lease their real property
distribute the property tax savings to all renters and lessors.
B&P further notes that it is unclear whether this proposal would impact state property tax levies,
if there were a statewide shutdown order. B&P also notes that the Blind Pension Trust Fund
levies a $0.03 per $100 assessed value property tax on all real and personal property located
within Missouri.
B&P is unaware of any restrictive public health orders currently in effect. Therefore, this
proposal may have an unknown impact on state and local revenues in the future. L.R. No. 2087H.01I
Bill No. HB 1263
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B&P notes the following concerns with the proposed language:
o
were a statewide shutdown order. Section 44.251.2(2) includes orders by the state
within the definition of “shutdown order”.
Therefore, B&P assumes that if there were a statewide shutdown order, state revenues would be
impacted through the reduction in license fees as well as reductions in real and personal business
property.
o
license fees for six months for any shutdown order that lasts less than 180 days.
If a business is closed due to a shutdown order for 22 consecutive days, the
political subdivision must still waive the fees for the full 180 days.
B&P further notes that the last sentence Section 44.251.4(1)(a) allows business license fees to be
prorated, but the language provides no information as to how they may be prorated. B&P
assumes that the license fees may be prorated for the remaining six months (or less depending on
the length of the closure) of the year. B&P further assumes that the license fees may not be
prorated to account for only the days a business was actually closed (if less than six months).
st
o
if a taxpayer paid the reduced tax after December 31. It is unclear whether the
taxpayer would be assessed interest and penalties on the reduced tax liability or
on the full tax liability.
o
liable for the full tax amount (amount before reduction) if they pay the tax
liability after December 31st.
st
o
after December 31st. Whether a late payment would disqualify such taxpayer
from receiving a refund, or whether interest and penalties would be assessed on
the full tax liability or the remaining tax liability accounting for the refund
amount.
o
to review and calculate the eligible refund amount for all refund claims within
that county. B&P notes that as of 2019, the median number of businesses per
county was 385 and there were 25 counties with over 1,000 businesses. L.R. No. 2087H.01I
Bill No. HB 1263
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Officials from the Jackson County Assessor assume this proposed legislation could have a
significant negative impact on County and other taxing jurisdiction’s operations if the County
were required to adjust property tax amounts for days closed due to public health order. This
fiscal impact could be measured in the millions of dollars when applied across all taxing
jurisdictions such as school districts and fire protection districts.
In 2020, Jackson County asked for the closure of all businesses deemed non-essential only after
receiving guidance from the state Department of Health and federal Center for Disease Control
(CDC). As soon as those closure recommendations changed at the federal and state levels,
Jackson County eliminated its closure guidelines. A future national public health or public
safety emergency may require the temporary closure of certain facilities to maintain public
safety. Jackson County and its taxing jurisdictions should not be penalized for acting in the best
interest of public health or safety.
Officials from the City of Kansas City note this legislation could have a negative fiscal impact
on Kansas City in an indeterminate amount if it were liable under the provisions of this
legislation.
Officials from the City of Springfield anticipates a possible negative fiscal impact from this bill
if the City ever needed to issue a shut-down order.
Officials from the State Tax Commission and the Department of Social Services each assume
the proposal will have no fiscal impact on their respective organizations. Oversight does not
have any information to the contrary. Therefore, Oversight will reflect a zero impact in the fiscal
note for these agencies.
For purposes of this fiscal note, Oversight assumes this proposal would not impact the Blind
Pension Fund. If this assumption is incorrect, it could substantially alter the impact provided in
this fiscal note.
Oversight will present an impact on this fiscal note as a $0 (no shutdown order in implemented)
to an unknown loss in revenue to local political subdivisions for the reduced property tax
revenues and the waived business license fees.
FISCAL IMPACT – State GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026$0$0$0 L.R. No. 2087H.01I
Bill No. HB 1263
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FISCAL IMPACT – Local GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026LOCAL POLITICAL
SUBDIVISIONS
Revenue Reduction - §44.251 –
Reduction in real and personal property
tax revenues in the event of a shutdown
order
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
Revenue Reduction - §44.251 –
Waiving of business license fees in the
event of a shutdown order
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
ESTIMATED NET EFFECT ON
LOCAL POLITICAL
SUBDIVISIONS
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
FISCAL IMPACT – Small Business
This proposal could impact small businesses that may be shut down by waiving and reimbursing
business license fees.
FISCAL DESCRIPTION
This bill establishes the "Protecting Missouri's Small Businesses Act". This bill requires the state
of Missouri and its political subdivisions to give careful consideration and appropriate concern
for the lasting effects of actions taken during a state of emergency that adversely affect the
economic viability and wellbeing of Missourians and businesses.
The bill provides that beginning January 1, 2024, if any political subdivision with jurisdiction
over a business, implements any shutdown order(s) after the Governor declares a state of
emergency, and the business closes due to the shutdown order for at least 21 consecutive days or
at least 45 cumulative days, the following requirements apply:
(1) Waiving of any fee for a business license during the period of the shutdown order(s) or
six months, whichever is longer; and
(2) Reducing the real and personal property tax liability of the business based on the number
of days the business was shut down in a given year, as further explained in the bill.
If a taxpayer rents or leases all or a portion of the taxpayer's affected real property to one or
more renters or lessors, the taxpayer shall do a pro rata distribution of the amount by which
the tax liability is reduced, to the renters or lessors who are current on all lease or rental
payments. L.R. No. 2087H.01I
Bill No. HB 1263
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This bill is not to be construed as an exemption of property from taxation that requires the
state to provide restitution or replacement of lost revenues to a political subdivision.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Office of Administration - Budget and Planning
State Tax Commission
Department of Social Services
Jackson County Assessor
City of Kansas City
City of Springfield
Julie MorffRoss StropeDirectorAssistant DirectorMarch 7, 2023March 7, 2023