EXPLANATION-Matter enclosed in bold-faced brackets [thus] in this bill is not enacted
and is intended to be omitted in the law.
FIRST REGULAR SESSION
SENATE COMMITTEE SUBSTITUTE FOR
SENATE BILL NO. 184
102ND GENERAL ASSEMBLY
0311S.03C KRISTINA MARTIN, Secretary
AN ACT
To repeal section 144.030, RSMo, and to enact in lieu thereof four new sections relating to tax
relief for child-related expenses.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Section 144.030, RSMo, is repealed and four 1
new sections enacted in lieu thereof, to be known as sections 2
135.1310, 135.1325, 135.1350, a nd 144.030, to read as follows:3
135.1310. 1. This section shall be known and may be 1
cited as the "Child Care Contribution Tax Credit Act". 2
2. For purposes of this section, the following terms 3
shall mean: 4
(1) "Child care", the same as defined in section 5
210.201; 6
(2) "Child care desert", a census tract that has a 7
poverty rate of at least twenty percent or a median family 8
income of less than eighty percent of the statewide average 9
and where at least five hundred people or thirty -three 10
percent of the population are located at least one -half mile 11
away from a child care provider in urbanized areas or at 12
least ten miles away in rural areas; 13
(3) "Child care provider", a child care provider as 14
defined in section 210.201 that is licensed pursuant to 15
section 210.221, or that is unlicensed and that is 16 SCS SB 184 2
registered with the department of elementary and secondary 17
education; 18
(4) "Contribution", an eligible donation of cash, 19
stock, bonds or other marketable securities, or rea l 20
property; 21
(5) "Department", the Missouri department of economic 22
development; 23
(6) "Person related to the taxpayer", an individual 24
connected with the taxpayer by blood, adoption, or marriage, 25
or an individual, corporation, partnership, limi ted 26
liability company, trust, or association controlled by, or 27
under the control of, the taxpayer directly, or through an 28
individual, corporation, limited liability company, 29
partnership, trust, or association under the control of the 30
taxpayer; 31
(7) "Rural area", a town or community within the state 32
that is not within a metropolitan statistical area and has a 33
population of six thousand or fewer inhabitants as 34
determined by the last preceding federal decennial census or 35
any unincorporated area n ot within a metropolitan 36
statistical area; 37
(8) "State tax liability", in the case of a business 38
taxpayer, any liability incurred by such taxpayer pursuant 39
to chapter 143 and chapter 148, exclusive of the provisions 40
relating to the withholding of tax as provided for in 41
sections 143.191 to 143.265 and related provisions, and in 42
the case of an individual taxpayer, any liability incurred 43
by such taxpayer pursuant to chapter 143; 44
(9) "Tax credit", a credit against the taxpayer's 45
state tax liability; 46
(10) "Taxpayer", a corporation as defined in section 47
143.441 or 143.471, any charitable organization that is 48 SCS SB 184 3
exempt from federal income tax and whose Missouri unrelated 49
business taxable income, if any, would be subject to the 50
state income tax imposed under chapter 143, or individuals 51
or partnerships subject to the state income tax imposed by 52
the provisions of chapter 143. 53
3. For all tax years beginning on or after January 1, 54
2023, a taxpayer may claim the tax credit authorized in this 55
section against the taxpayer's state tax liability for the 56
tax year in which a verified contribution was made in an 57
amount equal to up to seventy -five percent of the verified 58
contribution to a child care provider. The minimum amount 59
of any tax credit issued shall not be less than one hundred 60
dollars and shall not exceed two hundred thousand dollars 61
per tax year. 62
(1) The child care provider receiving a contribution 63
shall, within sixty days of the date it received the 64
contribution, issue the taxpayer a contribution verification 65
and file a copy of the contribution verification with the 66
department. The contribution verification shall be in the 67
form established by the department and shall include the 68
taxpayer's name, taxpayer's state or federal tax 69
identification number or last four digits of the taxpayer's 70
Social Security number, amount of tax credit, amount of 71
contribution, legal name and address of the child care 72
provider receiving the tax credit, the child care provider's 73
federal employer identification number, the child care 74
provider's departmental vendor number or license number, and 75
the date the child care provider received the contribution 76
from the taxpayer. The contribution verification shall 77
include a signed attestation stating the child care provider 78
will use the contribution solely to promote child care. 79 SCS SB 184 4
(2) The failure of the child care provider to timely 80
issue the contribution verification to the taxpayer or file 81
it with the department shall entitle the taxp ayer to a 82
refund of the contribution from the child care provider. 83
4. A donation is eligible when: 84
(1) The donation is used directly by a child care 85
provider to promote child care for children twelve years of 86
age or younger, including by acq uiring or improving child 87
care facilities, equipment, or services, or improving staff 88
salaries, staff training, or the quality of child care; 89
(2) The donation is made to a child care provider in 90
which the taxpayer or a person related to the taxpay er does 91
not have a direct financial interest; and 92
(3) The donation is not made in exchange for care of a 93
child or children in the case of an individual taxpayer that 94
is not an employer making a contribution on behalf of its 95
employees. 96
5. A child care provider that uses the contribution 97
for an ineligible purpose shall repay to the department the 98
value of the tax credit for the contribution amount used for 99
an ineligible purpose. 100
6. The tax credits authorized by this section shall 101
not be refundable and shall not be transferred, sold, or 102
otherwise conveyed. Any amount of approved tax credits that 103
a taxpayer is prohibited by this subsection from using for 104
the tax year in which the credit is first claimed may be 105
carried back to the t axpayer's immediately prior tax year 106
and carried forward to the taxpayer's subsequent tax year 107
for up to five succeeding tax years. 108
7. Notwithstanding any provision of subsection 6 of 109
this section to the contrary, a taxpayer that is exempt, 110
under 26 U.S.C. Section 501(c)(3), and any amendments 111 SCS SB 184 5
thereto, from all or part of the federal income tax shall be 112
eligible for a refund of its tax credit issued under this 113
section, without regard to whether it has incurred any state 114
tax liability. Such exempt taxpayer may claim a refund of 115
the tax credit on its tax return required to be filed under 116
the provisions of chapter 143, exclusive of the return for 117
the withholding of tax under sections 143.191 to 143.265. 118
If such exempt taxpayer is not require d to file a tax return 119
under the provisions of chapter 143, the exempt taxpayer may 120
claim a refund of the tax credit on a refund claim form 121
prescribed by the department of revenue. The department of 122
revenue shall prescribe such forms, instructions, an d rules 123
as it deems appropriate to carry out the provisions of this 124
subsection. 125
8. (1) The cumulative amount of tax credits 126
authorized pursuant to this section shall not exceed twenty 127
million dollars for each calendar year. The department 128
shall approve tax credit applications on a first -come, first- 129
served basis until the cumulative tax credit authorization 130
limit is reached for the calendar year. A taxpayer shall 131
apply to the department for the child care contribution tax 132
credit by submitting a copy of the contribution verification 133
provided by a child care provider to such taxpayer. Upon 134
receipt of the contribution verification, the department 135
shall issue a tax credit certificate to the applicant. 136
(2) If the maximum amount of tax c redits allowed in 137
any calendar year as provided pursuant to subdivision (1) of 138
this subsection is authorized, the maximum amount of tax 139
credits allowed pursuant to subdivision (1) of this 140
subsection shall be increased by fifteen percent, provided 141
that all such increases in the allowable amount of tax 142
credits shall be reserved for contributions made to child 143 SCS SB 184 6
care providers located in a child care desert. The director 144
of the department shall publish such adjusted amount. 145
9. The tax credits allo wed under this section shall be 146
considered a domestic and social tax credit under 147
subdivision (5) of subsection 2 of section 135.800. 148
10. All action and communication undertaken or 149
required under this section shall be exempt from section 150
105.1500. 151
11. The department may promulgate rules to implement 152
and administer the provisions of this section. Any rule or 153
portion of a rule, as that term is defined in section 154
536.010, that is created pursuant to the authority delegated 155
in this section shall become effective only if it complies 156
with and is subject to all of the provisions of chapter 536 157
and, if applicable, section 536.028. This section and 158
chapter 536 are nonseverable and if any of the powers vested 159
with the general assembly pursuan t to chapter 536 to review, 160
to delay the effective date, or to disapprove and annul a 161
rule are subsequently held unconstitutional, then the grant 162
of rulemaking authority and any rule proposed or adopted 163
after August 28, 2023, shall be invalid and void. 164
12. Pursuant to section 23.253 of the Missouri sunset 165
act: 166
(1) The program authorized under this section shall 167
expire on December 31, 2029, unless reauthorized by the 168
general assembly; 169
(2) The act shall terminate on September first of the 170
calendar year immediately following the calendar year in 171
which the program authorized under this section is sunset; 172
(3) If such program is reauthorized, the program 173
authorized under this act shall automatically sunset six 174 SCS SB 184 7
years after the effective date of the reauthorization of 175
this section; and 176
(4) The provisions of this subsection shall not be 177
construed to limit or in any way impair the department of 178
revenue's ability to redeem tax credits authorized on or 179
before the date the prog ram authorized pursuant to this 180
section expires or a taxpayer's ability to redeem such tax 181
credits. 182
135.1325. 1. This section shall be known and may be 1
cited as the "Employer Provided Child Care Assistance Tax 2
Credit Act". 3
2. For purposes of this section, the following terms 4
shall mean: 5
(1) "Child care desert", a census tract that has a 6
poverty rate of at least twenty percent or a median family 7
income of less than eighty percent of the statewide average 8
and where at least five hundred people or thirty -three 9
percent of the population are located at least one -half mile 10
away from a child care provider in urbanized areas or at 11
least ten miles away in rural areas; 12
(2) "Child care facility", a child care facility a s 13
defined in section 210.201 that is licensed pursuant to 14
section 210.221, or that is unlicensed and that is 15
registered with the department of elementary and secondary 16
education; 17
(3) "Department", the Missouri department of economic 18
development; 19
(4) "Employer matching contribution", a contribution 20
made by the taxpayer to a cafeteria plan, as that term is 21
used in 26 U.S.C. Section 125, of an employee of the 22
taxpayer, which matches a dollar amount or percentage of the 23
employee's contribut ion to the cafeteria plan. "Employer 24 SCS SB 184 8
matching contribution" shall not include the amount of any 25
salary reduction or other compensation foregone by the 26
employee in connection with the cafeteria plan; 27
(5) "Qualified child care expenditure", an amou nt paid 28
of reasonable costs incurred that meet any of the following: 29
(a) To acquire, construct, rehabilitate, or expand 30
property that will be, or is, used as part of a child care 31
facility that is either operated by the taxpayer or 32
contracted with by the taxpayer and which does not 33
constitute part of the principal residence of the taxpayer 34
or any employee of the taxpayer; 35
(b) For the operating costs of a child care facility 36
of the taxpayer, including costs relating to the training of 37
employees, scholarship programs, and for compensation to 38
employees; 39
(c) Under a contract with a child care facility to 40
provide child care services to employees of the taxpayer; or 41
(d) As an employer matching contribution, but only to 42
the extent such employer matching contribution is restricted 43
by the taxpayer solely for the taxpayer's employee to obtain 44
child care services at a child care facility and is used for 45
that purpose during the tax year; 46
(6) "Rural area", a town or community wit hin the state 47
that is not within a metropolitan statistical area and has a 48
population of six thousand or fewer inhabitants as 49
determined by the last preceding federal decennial census or 50
any unincorporated area not within a metropolitan 51
statistical area; 52
(7) "State tax liability", in the case of a business 53
taxpayer, any liability incurred by such taxpayer pursuant 54
to the provisions of chapter 143 and chapter 148, exclusive 55
of the provisions relating to the withholding of tax as 56 SCS SB 184 9
provided for in sections 143.191 to 143.265 and related 57
provisions, and in the case of an individual taxpayer, any 58
liability incurred by such taxpayer pursuant to the 59
provisions of chapter 143; 60
(8) "Tax credit", a credit against the taxpayer's 61
state tax liability; 62
(9) "Taxpayer", a corporation as defined in section 63
143.441 or 143.471, any charitable organization that is 64
exempt from federal income tax and whose Missouri unrelated 65
business taxable income, if any, would be subject to the 66
state income tax imposed under chapter 143, or individuals 67
or partnerships subject to the state income tax imposed by 68
the provisions of chapter 143. 69
3. For all tax years beginning on or after January 1, 70
2023, a taxpayer may claim a tax credit authorized in this 71
section in an amount equal to thirty percent of the 72
qualified child care expenditures paid or incurred with 73
respect to a child care facility. The maximum amount of any 74
tax credit issued under this section shall not exceed two 75
hundred thousand dollars per taxpayer per tax year. 76
4. A facility shall not be treated as a child care 77
facility with respect to a taxpayer unless the following 78
conditions have been met: 79
(1) Enrollment in the facility is open to employees of 80
the taxpayer during the t ax year; and 81
(2) If the facility is the principal business of the 82
taxpayer, at least thirty percent of the enrollees of such 83
facility are dependents of employees of the taxpayer. 84
5. The tax credits authorized by this section shall 85
not be refundable or transferable. The tax credits shall 86
not be sold, assigned, or otherwise conveyed. Any amount of 87
approved tax credits that a taxpayer is prohibited by this 88 SCS SB 184 10
subsection from using for the tax year in which the credit 89
is first claimed may be c arried back to the taxpayer's 90
immediately prior tax year and carried forward to the 91
taxpayer's subsequent tax year for up to five succeeding tax 92
years. 93
6. Notwithstanding any provision of subsection 5 of 94
this section to the contrary, a taxpayer t hat is exempt, 95
under 26 U.S.C. Section 501(c)(3), and any amendments 96
thereto, from all or part of the federal income tax shall be 97
eligible for a refund of its tax credit issued under this 98
section, without regard to whether it has incurred any state 99
tax liability. Such exempt taxpayer may claim a refund of 100
the tax credit on its tax return required to be filed under 101
the provisions of chapter 143, exclusive of the return for 102
the withholding of tax under sections 143.191 to 143.265. 103
If such exempt taxpayer is not required to file a tax return 104
under the provisions of chapter 143, the exempt taxpayer may 105
claim a refund of the tax credit on a refund claim form 106
prescribed by the department of revenue. The department of 107
revenue shall prescribe such fo rms, instructions, and rules 108
as it deems appropriate to carry out the provisions of this 109
subsection. 110
7. (1) The cumulative amount of tax credits 111
authorized pursuant to this section shall not exceed twenty 112
million dollars for each calendar year. The department 113
shall approve tax credit applications on a first -come, first- 114
served basis until the cumulative tax credit authorization 115
limit is reached for the calendar year. 116
(2) If the maximum amount of tax credits allowed in 117
any calendar year as provided pursuant to subdivision (1) of 118
this subsection is authorized, the maximum amount of tax 119
credits allowed pursuant to subdivision (1) of this 120 SCS SB 184 11
subsection shall be increased by fifteen percent, provided 121
that all such increases in the allowable amount of tax 122
credits shall be reserved for qualified child care 123
expenditures for child care facilities located in a child 124
care desert. The director of the department shall publish 125
such adjusted amount. 126
8. A taxpayer who has claimed a tax credit under this 127
section shall notify the department within sixty days of any 128
cessation of operation, change in ownership, or agreement to 129
assume recapture liability as such terms are defined by 26 130
U.S.C. Section 45F, in the form and manner prescribed by 131
department rule or instruction. If there is a cessation of 132
operation or change in ownership relating to a child care 133
facility, the taxpayer shall repay the department the 134
applicable recapture percentage of the credit allowed under 135
this section, but thi s recapture amount shall be limited to 136
the tax credit allowed under this section. The recapture 137
amount shall be considered a tax liability arising on the 138
tax payment due date for the tax year in which the cessation 139
of operation, change in ownership, o r agreement to assume 140
recapture liability occurred and shall be assessed and 141
collected under the same provisions that apply to a tax 142
liability under chapter 143 or chapter 148. 143
9. The tax credit allowed pursuant to this section 144
shall be considered a domestic and social tax credit under 145
subdivision (5) of subsection 2 of section 135.800. 146
10. All action and communication undertaken or 147
required under this section shall be exempt from section 148
105.1500. 149
11. The department may promulgate rules to implement 150
and administer the provisions of this section. Any rule or 151
portion of a rule, as that term is defined in section 152 SCS SB 184 12
536.010, that is created pursuant to the authority delegated 153
in this section shall become effective only if it complies 154
with and is subject to all of the provisions of chapter 536 155
and, if applicable, section 536.028. This section and 156
chapter 536 are nonseverable and if any of the powers vested 157
with the general assembly pursuant to chapter 536 to review, 158
to delay the effective date, or to disapprove and annul a 159
rule are subsequently held unconstitutional, then the grant 160
of rulemaking authority and any rule proposed or adopted 161
after August 28, 2023, shall be invalid and void. 162
12. Pursuant to section 23.253 of t he Missouri sunset 163
act: 164
(1) The program authorized under this act shall expire 165
on December 31, 2029, unless reauthorized by the general 166
assembly; 167
(2) The act shall terminate on September first of the 168
calendar year immediately following the calendar year in 169
which the program authorized under the act is sunset; 170
(3) If such program is reauthorized, the program 171
authorized under this act shall automatically sunset six 172
years after the effective date of the reauthorization of the 173
act; and 174
(4) The provisions of this subsection shall not be 175
construed to limit or in any way impair the department of 176
revenue's ability to redeem tax credits authorized on or 177
before the date the program authorized pursuant to this 178
section expires or a ta xpayer's ability to redeem such tax 179
credits. 180
135.1350. 1. This section shall be known and may be 1
cited as the "Child Care Providers Tax Credit Act". 2
2. For purposes of this section, the following terms 3
shall mean: 4 SCS SB 184 13
(1) "Capital expenditures", expenses incurred by a 5
child care provider, during the tax year for which a tax 6
credit is claimed pursuant to this section, for the 7
construction, renovation, or rehabilitation of a child care 8
facility to the extent necessary to op erate a child care 9
facility and comply with applicable child care facility 10
regulations promulgated by the department of elementary and 11
secondary education; 12
(2) "Child care desert", a census tract that has a 13
poverty rate of at least twenty percent or a median family 14
income of less than eighty percent of the statewide average 15
and where at least five hundred people or thirty -three 16
percent of the population are located at least one -half mile 17
away from a child care provider in urbanized areas or at 18
least ten miles away in rural areas; 19
(3) "Child care facility", the same as defined in 20
section 210.201; 21
(4) "Child care provider", a child care provider as 22
defined in section 210.201 that is licensed pursuant to 23
section 210.221, or that is unlicensed and that is 24
registered with the department of elementary and secondary 25
education; 26
(5) "Department", the department of elementary and 27
secondary education; 28
(6) "Employee", an employee, as that term is used in 29
subsection 2 of secti on 143.191, of a child care provider 30
who worked for the child care provider for an average of at 31
least ten hours per week for at least a three -month period 32
during the tax year for which a tax credit is claimed 33
pursuant to this section and who is not an immediate family 34
member of the child care provider; 35 SCS SB 184 14
(7) "Eligible employer withholding tax", the total 36
amount of tax that the child care provider was required, 37
under section 143.191, to deduct and withhold from the wages 38
it paid to employees dur ing the tax year for which the child 39
care provider is claiming a tax credit pursuant to this 40
section, to the extent actually paid; 41
(8) "Rural area", a town or community within the state 42
that is not within a metropolitan statistical area and has a 43
population of six thousand or fewer inhabitants as 44
determined by the last preceding federal decennial census or 45
any unincorporated area not within a metropolitan 46
statistical area; 47
(9) "State tax liability", any liability incurred by 48
the taxpayer pursuant to the provisions of chapter 143, 49
exclusive of the provisions relating to the withholding of 50
tax as provided for in sections 143.191 to 143.265 and 51
related provisions; 52
(10) "Tax credit", a credit against the taxpayer's 53
state tax liability; 54
(11) "Taxpayer", a corporation as defined in section 55
143.441 or 143.471, any charitable organization that is 56
exempt from federal income tax and whose Missouri unrelated 57
business taxable income, if any, would be subject to the 58
state income tax imposed under chapter 143, or an individual 59
or partnership subject to the state income tax imposed by 60
the provisions of chapter 143. 61
3. For all tax years beginning on or after January 1, 62
2024, a child care provider with three or more employees ma y 63
claim a tax credit authorized in this section in an amount 64
equal to the child care provider's eligible employer 65
withholding tax, and may also claim a tax credit in an 66
amount up to thirty percent of the child care provider's 67 SCS SB 184 15
capital expenditures. No tax credit for capital 68
expenditures shall be allowed if the capital expenditures 69
are less than one thousand dollars. The amount of any tax 70
credit issued under this section shall not exceed two 71
hundred thousand dollars per child care provider per tax 72
year. 73
4. To claim a tax credit authorized pursuant to this 74
section, a child care provider shall submit to the 75
department, for preliminary approval, an application for the 76
tax credit on a form provided by the department and at such 77
times as the department may require. If the child care 78
provider is applying for a tax credit for capital 79
expenditures, the child care provider shall present proof 80
acceptable to the department that the child care provider's 81
capital expenditures satisfy the requireme nts of subdivision 82
(1) of subsection 2 of this section. Upon final approval of 83
an application, the department shall issue the child care 84
provider a certificate of tax credit. 85
5. The tax credits authorized by this section shall 86
not be refundable and shall not be transferred, sold, 87
assigned, or otherwise conveyed. Any amount of credit that 88
exceeds the child care provider's state tax liability for 89
the tax year for which the tax credit is issued may be 90
carried back to the child care provider's i mmediately prior 91
tax year or carried forward to the child care provider's 92
subsequent tax year for up to five succeeding tax years. 93
6. Notwithstanding any provision of subsection 5 of 94
this section to the contrary, a child care provider that is 95
exempt, under 26 U.S.C. Section 501(c)(3), and any 96
amendments thereto, from all or part of the federal income 97
tax shall be eligible for a refund of its tax credit issued 98
under this section, without regard to whether it has 99 SCS SB 184 16
incurred any state tax liability . Such exempt child care 100
provider may claim a refund of the tax credit on its tax 101
return required to be filed under the provisions of chapter 102
143, exclusive of the return for the withholding of tax 103
under sections 143.191 to 143.265. If such exempt child 104
care provider is not required to file a tax return under the 105
provisions of chapter 143, the exempt child care provider 106
may claim a refund of the tax credit on a refund claim form 107
prescribed by the department of revenue. The department of 108
revenue shall prescribe such forms, instructions, and rules 109
as it deems appropriate to carry out the provisions of this 110
subsection. 111
7. (1) The cumulative amount of tax credits 112
authorized pursuant to this section shall not exceed twenty 113
million dollars for each calendar year. The department 114
shall approve tax credit applications on a first -come, first- 115
served basis until the cumulative tax credit authorization 116
limit is reached for the calendar year. 117
(2) If the maximum amount of tax credits allowed in 118
any calendar year as provided pursuant to subdivision (1) of 119
this subsection is authorized, the maximum amount of tax 120
credits allowed pursuant to subdivision (1) of this 121
subsection shall be increased by fifteen percent, provided 122
that all such increases in the allowable amount of tax 123
credits shall be reserved for child care providers located 124
in a child care desert. The director of the department 125
shall publish such adjusted amount. 126
8. The tax credit authorized by this section shall be 127
considered a domestic and social tax credit under 128
subdivision (5) of subsection 2 of section 135.800. 129
9. All action and communication undertaken or required 130
with respect to this section shall be exempt from section 131 SCS SB 184 17
105.1500. Notwithstanding section 3 2.057 or any other tax 132
confidentiality law to the contrary, the department of 133
revenue may disclose tax information to the department for 134
the purpose of the verification of a child care provider's 135
eligible employer withholding tax under this section. 136
10. The department may promulgate rules and adopt 137
statements of policy, procedures, forms and guidelines to 138
implement and administer the provisions of this section. 139
Any rule or portion of a rule, as that term is defined in 140
section 536.010, that is created pursuant to the authority 141
delegated in this section shall become effective only if it 142
complies with and is subject to all of the provisions of 143
chapter 536 and, if applicable, section 536.028. This 144
section and chapter 536 are nonseverable and if any of the 145
powers vested with the general assembly pursuant to chapter 146
536 to review, to delay the effective date, or to disapprove 147
and annul a rule are subsequently held unconstitutional, 148
then the grant of rulemaking authority and any rule proposed 149
or adopted after August 28, 2023, shall be invalid and void. 150
11. Pursuant to section 23.253 of the Missouri sunset 151
act: 152
(1) The program authorized under this section shall 153
expire on December 31, 2029, unless reauthorized by the 154
general assembly; 155
(2) The act shall terminate on September first of the 156
calendar year immediately following the calendar year in 157
which the program authorized under this section is sunset; 158
(3) If such program is reauthorized, the program 159
authorized under this section shall automatically sunset six 160
years after the effective date of the reauthorization of 161
this section; and 162 SCS SB 184 18
(4) The provisions of this subsection shall not be 163
construed to limit or in any way impair the department of 164
revenue's ability to redeem tax credits authorized on or 165
before the date the program authorized pursuant to this 166
section expires or a taxpayer's ability to redeem such tax 167
credits. 168
144.030. 1. There is hereby specifically exempted 1
from the provisions of sections 144.010 to 144.525 and from 2
the computation of the tax levied, assessed or payable 3
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 betw een 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 238.23 5, and sections 144.010 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, electrical 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 SCS SB 184 19
to be sold ultimately in processed form at retail; or seed, 27
limestone or fertiliz er 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] act, sections 33
[281.220] 281.210 to 281.310, which are to be used in 34
connection with the growth or production of crops, fruit 35
trees or orchards applied before, during, or after planting, 36
the crop of which when harvested will be sold at retail or 37
will be converted into foodstuffs which are to be sold 38
ultimately in processed form at retail; 39
(2) Materials, manufactured goods, machinery and parts 40
which when used in manufacturing, processing, compounding , 41
mining, producing or fabricating 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 consumption; 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, re acting 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 directl y 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 SCS SB 184 20
(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 consu mption; and 64
machinery and equipment, 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
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 prod ucing 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 144.010, 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 mak e 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 SCS SB 184 21
subdivision and subdivision (5) of th is 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. Director 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 exempt ions 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
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. banc 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 p roduct 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 installation 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 i n 122 SCS SB 184 22
manufacturing, mining or fabricating 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
(7) Animals or poultry used for breeding or fe eding 136
purposes, or captive wildlife; 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 n ews 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 SCS SB 184 23
a product, or electrical energy used in the actual secondary 155
processing or fabricating of the product, or a material 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 materials 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
or series of acts perform ed 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 monit oring 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 u sed solely for the purpose of 184
preventing, abating or monitoring water pollution, and 185
materials and supplies solely required for the installation, 186 SCS SB 184 24
construction or reconstruction of such machinery, equipment, 187
appliances and devices; 188
(16) Tangible personal property purchased by a rural 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 at hletic 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 corporation, provided, however, that a 199
municipality or other political subdivision may enter into 200
revenue-sharing agreements with private persons, firms, or 201
corporations providing goods or services, including 202
management services, in or for the place of amusement, 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 (42 213
U.S.C. Section 1395y, as amended) , and also specifically 214
including hearing aids and hearing aid supplies and all 215
sales of drugs which may be le gally dispensed by a licensed 216
pharmacist only upon a lawful prescription of a practitioner 217
licensed to administer those items, including samples and 218 SCS SB 184 25
materials used to manufacture samples which may be dispensed 219
by a practitioner authorized to dispense s uch samples and 220
all sales or rental of medical oxygen, home respiratory 221
equipment and accessories including parts, and hospital beds 222
and accessories and ambulatory aids including parts, and all 223
sales or rental of manual and powered wheelchairs includin g 224
parts, and stairway lifts, Braille writers, electronic 225
Braille equipment and, if purchased or rented by or on 226
behalf of a person with one or more physical or mental 227
disabilities to enable them to function more independently, 228
all sales or rental of s cooters including parts, and reading 229
machines, electronic print enlargers and magnifiers, 230
electronic alternative and augmentative communication 231
devices, and items used solely to modify motor vehicles to 232
permit the use of such motor vehicles by individu als with 233
disabilities or sales of over -the-counter or nonprescription 234
drugs to individuals with disabilities, and drugs required 235
by the Food and Drug Administration to meet the over -the- 236
counter drug product labeling requirements in 21 CFR 201.66, 237
or its successor, as prescribed by a health care 238
practitioner licensed to prescribe; 239
(19) All sales made by or to religious and charitable 240
organizations and institutions in their religious, 241
charitable or educational functions and activities and all 242
sales made by or to all elementary and secondary schools 243
operated at public expense in their educational functions 244
and activities; 245
(20) All sales of aircraft to common carriers for 246
storage or for use in interstate commerce and all sales made 247
by or to not-for-profit civic, social, service or fraternal 248
organizations, including fraternal organizations which have 249
been declared tax-exempt organizations pursuant to Section 250 SCS SB 184 26
501(c)(8) or (10) of the 1986 Internal Revenue Code, as 251
amended, in their civi c or charitable functions and 252
activities and all sales made to eleemosynary and penal 253
institutions and industries of the state, and all sales made 254
to any private not-for-profit institution of higher 255
education not otherwise excluded pursuant to subdivis ion 256
(19) of this subsection or any institution of higher 257
education supported by public funds, and all sales made to a 258
state relief agency in the exercise of relief functions and 259
activities; 260
(21) All ticket sales made by benevolent, scientific 261
and educational associations which are formed to foster, 262
encourage, and promote progress and improvement in the 263
science of agriculture and in the raising and breeding of 264
animals, and by nonprofit summer theater organizations if 265
such organizations are exe mpt from federal tax pursuant to 266
the provisions of the Internal Revenue Code and all 267
admission charges and entry fees to the Missouri state fair 268
or any fair conducted by a county agricultural and 269
mechanical society organized and operated pursuant to 270
sections 262.290 to 262.530; 271
(22) All sales made to any private not -for-profit 272
elementary or secondary school, all sales of feed additives, 273
medications or vaccines administered to livestock or poultry 274
in the production of food or fiber, all sales o f pesticides 275
used in the production of crops, livestock or poultry for 276
food or fiber, all sales of bedding used in the production 277
of livestock or poultry for food or fiber, all sales of 278
propane or natural gas, electricity or diesel fuel used 279
exclusively for drying agricultural crops, natural gas used 280
in the primary manufacture or processing of fuel ethanol as 281
defined in section 142.028, natural gas, propane, and 282 SCS SB 184 27
electricity used by an eligible new generation cooperative 283
or an eligible new generatio n processing entity as defined 284
in section 348.432, and all sales of farm machinery and 285
equipment, other than airplanes, motor vehicles and 286
trailers, and any freight charges on any exempt item. As 287
used in this subdivision, the term "feed additives" mea ns 288
tangible personal property which, when mixed with feed for 289
livestock or poultry, is to be used in the feeding of 290
livestock or poultry. As used in this subdivision, the term 291
"pesticides" includes adjuvants such as crop oils, 292
surfactants, wetting ag ents and other assorted pesticide 293
carriers used to improve or enhance the effect of a 294
pesticide and the foam used to mark the application of 295
pesticides and herbicides for the production of crops, 296
livestock or poultry. As used in this subdivision, the term 297
"farm machinery and equipment" shall mean: 298
(a) New or used farm tractors and such other new or 299
used farm machinery and equipment, including utility 300
vehicles used for any agricultural use, and repair or 301
replacement parts thereon and any acces sories for and 302
upgrades to such farm machinery and equipment and rotary 303
mowers used for any agricultural purposes. For the purposes 304
of this subdivision, "utility vehicle" shall mean any 305
motorized vehicle manufactured and used exclusively for off - 306
highway use which is more than fifty inches but no more than 307
eighty inches in width, measured from outside of tire rim to 308
outside of tire rim, with an unladen dry weight of three 309
thousand five hundred pounds or less, traveling on four or 310
six wheels; 311
(b) Supplies and lubricants used exclusively, solely, 312
and directly for producing crops, raising and feeding 313
livestock, fish, poultry, pheasants, chukar, quail, or for 314 SCS SB 184 28
producing milk for ultimate sale at retail, including field 315
drain tile; and 316
(c) One-half of each purchaser's purchase of diesel 317
fuel therefor which is: 318
a. Used exclusively for agricultural purposes; 319
b. Used on land owned or leased for the purpose of 320
producing farm products; and 321
c. Used directly in producing farm p roducts to be sold 322
ultimately in processed form or otherwise at retail or in 323
producing farm products to be fed to livestock or poultry to 324
be sold ultimately in processed form at retail; 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
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 i ndividual 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 nonexempt based upon the 345
seller's utility service rate classifications as contained 346 SCS SB 184 29
in tariffs on file with and approved by the Missouri public 347
service commission. Sales and purchases made pursuant to 348
the rate classification "resid ential" 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 the 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
purchases of services or property a nd who uses any portion 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 SCS SB 184 30
purchases on behalf of occupants of residential apartments 379
or condominiums shall have standing t o apply to the director 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 the 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 afloat upon such river; 399
(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 provide d 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 the administrative management of at 409 SCS SB 184 31
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 defin ed in subdivision (4) of 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
(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 p ursuant 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 SCS SB 184 32
authorized to issue a certificate of exemption for purchases 442
to a contractor under the provisi ons of that state's laws. 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 revenue 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 o f 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 constructing, 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
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 SCS SB 184 33
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 university 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, "neutral 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 utilitie s 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
(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 business 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 SCS SB 184 34
(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 i ncorporated in this state, 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 weight; and the 528
materials, replacement parts, and equipment purchased for 529
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 highwa y" 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 SCS SB 184 35
internet access or a buyer of internet access. For purposes 536
of this subdivision, the following terms 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 authorit y would have incurred if 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 telecomm unications 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 telecomm unications, communications, 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
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 SCS SB 184 36
described in this subdivision, wh en furnished to users as 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 ac cess. 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 protoc ol 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 impose d 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 under sections 67.1830 to 67.1846 or 595
section 67.2689; Section 622 or 653 of the Communications 596
Act of 1934, 47 U.S.C. Section 542 and 47 U.S.C. Section 597
573; or any other fee related to obligations of 598
telecommunications carriers und er the Communications Act of 599 SCS SB 184 37
1934, 47 U.S.C. Section 151, et seq., except to the extent 600
that: 601
a. The fee is not imposed for the purpose of 602
recovering direct costs incurred by the franchising or other 603
governmental authority from providing the spec ific 604
privilege, service, or benefit conferred to the payer of the 605
fee; or 606
b. The fee is imposed for the use of a public right -of- 607
way based on a percentage of the service revenue, and the 608
fee exceeds the incremental direct costs incurred by the 609
governmental authority associated with the provision of that 610
right-of-way to the provider of internet access service. 611
Nothing in this subdivision shall be interpreted as an 612
exemption from taxes due on goods or services that were 613
subject to tax on January 1, 2016; 614
(46) All purchases by a company of solar photovoltaic 615
energy systems, components used to construct a solar 616
photovoltaic energy system, and all purchases of materials 617
and supplies used directly to construct or make improvements 618
to such systems, provided that such systems: 619
(a) Are sold or leased to an end user; or 620
(b) Are used to produce, collect and transmit 621
electricity for resale or retail ; 622
(47) All sales of diapers. For the purposes of this 623
subdivision, "diapers" me ans absorbent garments worn by 624
infants or toddlers who are not toilet -trained. 625
3. Any ruling, agreement, or contract, whether written 626
or oral, express or implied, between a person and this 627
state's executive branch, or any other state agency or 628
department, stating, agreeing, or ruling that such person is 629
not required to collect sales and use tax in this state 630 SCS SB 184 38
despite the presence of a warehouse, distribution center, or 631
fulfillment center in this state that is owned or operated 632
by the person or an affiliated person shall be null and void 633
unless it is specifically approved by a majority vote of 634
each of the houses of the general assembly. For purposes of 635
this subsection, an "affiliated person" means any person 636
that is a member of the same cont rolled group of 637
corporations as defined in Section 1563(a) of the Internal 638
Revenue Code of 1986, as amended, as the vendor or any other 639
entity that, notwithstanding its form of organization, bears 640
the same ownership relationship to the vendor as a 641
corporation that is a member of the same controlled group of 642
corporations as defined in Section 1563(a) of the Internal 643
Revenue Code, as amended. 644
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