COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:2087H.02P Bill No.:Perfected HCS for HB 1263 Subject:Emergencies; Business and Commerce; Fees; Taxation and Revenue - General;
Taxation and Revenue - Property
Type:Original Date:March 30, 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.02P
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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.02P
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FISCAL ANALYSIS
ASSUMPTION
Section 44.251 “Protecting Missouri’s Small Businesses Act”
In response to a previous version, (HCS HB 1263), 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 caused by reasons outside of a business’ control.
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.02P
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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.02P
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In response to a previous version (HB 1263), 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 substantial
impact of an indeterminate amount
Officials from the State Tax Commission assume the proposal will have no fiscal impact on
their organization. Oversight does not have any information to the contrary. Therefore,
Oversight will reflect a zero impact in the fiscal note.
Officials from the City of Springfield, the City of Claycomo, Cole Camp Ambulance District,
and the
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.
In response to a previous version, (HCS HB 1263), officials from the Department of Social
Services Oversight does
not have any information to the contrary.
In response to a previous version, (HCS HB 1263), officials from the St. Charles Community
College Kansas City Police Department each assume the proposal will have no fiscal
impact on their organization. Oversight does not have any information to the contrary.
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.
HA 2 - Section 44.251 L.R. No. 2087H.02P
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Oversight notes this amendment provides clarifying language and defines a “shutdown order”.
Oversight assumes this amendment will have no additional fiscal impact.
FISCAL IMPACT – Local GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026LOCAL POLITICAL
SUBDIVISIONS
FY 2024
(10 Mo.)
FY 2025FY 2026Revenue 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
FISCAL IMPACT – State GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026$0$0$0 L.R. No. 2087H.02P
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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.
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. L.R. No. 2087H.02P
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SOURCES OF INFORMATION
Office of Administration - Budget and Planning
State Tax Commission
Department of Social Services
Jackson County Assessor
City of Kansas City
Kansas City Police Department
City of Springfield
St. Charles Community College
City of Claycomo
St. Louis County Police Department
Cole Camp Ambulance District
Julie MorffRoss StropeDirectorAssistant DirectorMarch 30, 2023March 30, 2023