SECONDREGULARSESSION
HOUSEBILLNO.2457
102NDGENERALASSEMBLY
INTRODUCEDBYREPRESENTATIVEJUSTUS.
3988H.01I DANARADEMANMILLER,ChiefClerk
ANACT
Torepealsection143.121,RSMo,andtoenactinlieuthereofonenewsectionrelatingto
researchandexperimentationcosts.
BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
SectionA.Section143.121,RSMo,isrepealedandonenewsectionenactedinlieu
2thereof,tobeknownassection143.121,toreadasfollows:
143.121.1.TheMissouriadjustedgrossincomeofaresidentindividualshallbethe
2taxpayer'sfederaladjustedgrossincomesubjecttothemodificationsinthissection.
3 2.Thereshallbeaddedtothetaxpayer'sfederaladjustedgrossincome:
4 (1)Theamountofanyfederalincometaxrefundreceivedforaprioryearwhich
5resultedinaMissouriincometaxbenefit.Theamountaddedpursuanttothissubdivision
6shallnotincludeanyamountofafederalincometaxrefundattributabletoataxcredit
7reducingataxpayer'sfederaltaxliabilitypursuanttoPublicLaw116-136or116-260,enacted
8bythe116thUnitedStatesCongress,forthetaxyearbeginningonorafterJanuary1,2020,
9andendingonorbeforeDecember31,2020,anddeductedfromMissouriadjustedgross
10incomepursuanttosection143.171.Theamountaddedunderthissubdivisionshallalsonot
11includeanyamountofafederalincometaxrefundattributabletoataxcreditreducinga
12taxpayer'sfederaltaxliabilityunderanyotherfederallawthatprovidesdirecteconomic
13impactpaymentstotaxpayerstomitigatefinancialchallengesrelatedtotheCOVID-19
14pandemic,anddeductedfromMissouriadjustedgrossincomeundersection143.171;
15 (2)Interestoncertaingovernmentalobligationsexcludedfromfederalgrossincome
16by26U.S.C.Section103oftheInternalRevenueCode,asamended.Theprevioussentence
17shallnotapplytointerestonobligationsofthestateofMissourioranyofitspolitical
EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 18subdivisionsorauthoritiesandshallnotapplytotheinterestdescribedinsubdivision(1)of
19subsection3ofthissection.Theamountaddedpursuanttothissubdivisionshallbereduced
20bytheamountsapplicabletosuchinterestthatwouldhavebeendeductibleincomputingthe
21taxableincomeofthetaxpayerexceptonlyfortheapplicationof26U.S.C.Section265ofthe
22InternalRevenueCode,asamended.Thereductionshallonlybemadeifitisatleastfive
23hundreddollars;
24 (3)Theamountofanydeductionthatisincludedinthecomputationoffederal
25taxableincomepursuantto26U.S.C.Section168oftheInternalRevenueCodeasamended
26bytheJobCreationandWorkerAssistanceActof2002totheextenttheamountdeducted
27relatestopropertypurchasedonorafterJuly1,2002,butbeforeJuly1,2003,andtothe
28extenttheamountdeductedexceedstheamountthatwouldhavebeendeductiblepursuantto
2926U.S.C.Section168oftheInternalRevenueCodeof1986asineffectonJanuary1,2002;
30 (4)Theamountofanydeductionthatisincludedinthecomputationoffederal
31taxableincomefornetoperatinglossallowedby26U.S.C.Section172oftheInternal
32RevenueCodeof1986,asamended,otherthanthedeductionallowedby26U.S.C.Section
33172(b)(1)(G)and26U.S.C.Section172(i)oftheInternalRevenueCodeof1986,as
34amended,foranetoperatinglossthetaxpayerclaimsinthetaxyearinwhichthenet
35operatinglossoccurredorcarriesforwardforaperiodofmorethantwentyyearsandcarries
36backwardformorethantwoyears.Anyamountofnetoperatinglosstakenagainstfederal
37taxableincomebutdisallowedforMissouriincometaxpurposespursuanttothissubdivision
38afterJune18,2002,maybecarriedforwardandtakenagainstanyincomeontheMissouri
39incometaxreturnforaperiodofnotmorethantwentyyearsfromtheyearoftheinitialloss;
40and
41 (5)FornonresidentindividualsinalltaxableyearsendingonorafterDecember31,
422006,theamountofanypropertytaxespaidtoanotherstateorapoliticalsubdivisionof
43anotherstateforwhichadeductionwasallowedonsuchnonresident'sfederalreturninthe
44taxableyearunlesssuchstate,politicalsubdivisionofastate,ortheDistrictofColumbia
45allowsasubtractionfromincomeforpropertytaxespaidtothisstateforpurposesof
46calculatingincomefortheincometaxforsuchstate,politicalsubdivisionofastate,orthe
47DistrictofColumbia;
48 (6)ForalltaxyearsbeginningonorafterJanuary1,2018,anyinterestexpensepaid
49oraccruedinaprevioustaxableyear,butallowedasadeductionunder26U.S.C.Section
50163,asamended,inthecurrenttaxableyearbyreasonofthecarryforwardofdisallowed
51businessinterestprovisionsof26U.S.C.Section163(j),asamended.Forthepurposesofthis
52subdivision,aninterestexpenseisconsideredpaidoraccruedonlyinthefirsttaxableyearthe
53deductionwouldhavebeenallowableunder26U.S.C.Section163,asamended,ifthe
54limitationunder26U.S.C.Section163(j),asamended,didnotexist;
HB2457 2 55 (7)ForalltaxyearsbeginningonorafterJanuary1,2022,theamountdeducted
56bythetaxpayerunder26U.S.C.Section174(a)(2)(B),asamended,forthetaxyear.
57 3.Thereshallbesubtractedfromthetaxpayer'sfederaladjustedgrossincomethe
58followingamountstotheextentincludedinfederaladjustedgrossincome:
59 (1)Interestreceivedondepositsheldatafederalreservebankorinterestordividends
60onobligationsoftheUnitedStatesanditsterritoriesandpossessionsorofanyauthority,
61commissionorinstrumentalityoftheUnitedStatestotheextentexemptfromMissouri
62incometaxespursuanttothelawsoftheUnitedStates.Theamountsubtractedpursuantto
63thissubdivisionshallbereducedbyanyinterestonindebtednessincurredtocarrythe
64describedobligationsorsecuritiesandbyanyexpensesincurredintheproductionofinterest
65ordividendincomedescribedinthissubdivision.Thereductionintheprevioussentence
66shallonlyapplytotheextentthatsuchexpensesincludingamortizablebondpremiumsare
67deductedindeterminingthetaxpayer'sfederaladjustedgrossincomeorincludedinthe
68taxpayer'sMissouriitemizeddeduction.Thereductionshallonlybemadeiftheexpenses
69totalatleastfivehundreddollars;
70 (2)Theportionofanygain,fromthesaleorotherdispositionofpropertyhavinga
71higheradjustedbasistothetaxpayerforMissouriincometaxpurposesthanforfederal
72incometaxpurposesonDecember31,1972,thatdoesnotexceedsuchdifferenceinbasis.If
73againisconsideredalong-termcapitalgainforfederalincometaxpurposes,themodification
74shallbelimitedtoone-halfofsuchportionofthegain;
75 (3)Theamountnecessarytopreventthetaxationpursuanttothischapterofany
76annuityorotheramountofincomeorgainwhichwasproperlyincludedinincomeorgainand
77wastaxedpursuanttothelawsofMissouriforataxableyearpriortoJanuary1,1973,tothe
78taxpayer,ortoadecedentbyreasonofwhosedeaththetaxpayeracquiredtherighttoreceive
79theincomeorgain,ortoatrustorestatefromwhichthetaxpayerreceivedtheincomeor
80gain;
81 (4)Accumulationdistributionsreceivedbyataxpayerasabeneficiaryofatrusttothe
82extentthatthesameareincludedinfederaladjustedgrossincome;
83 (5)Theamountofanystateincometaxrefundforaprioryearwhichwasincludedin
84thefederaladjustedgrossincome;
85 (6)Theportionofcapitalgainspecifiedinsection135.357thatwouldotherwisebe
86includedinfederaladjustedgrossincome;
87 (7)Theamountthatwouldhavebeendeductedinthecomputationoffederaltaxable
88incomepursuantto26U.S.C.Section168oftheInternalRevenueCodeasineffecton
89January1,2002,totheextentthatamountrelatestopropertypurchasedonorafterJuly1,
902002,butbeforeJuly1,2003,andtotheextentthatamountexceedstheamountactually
HB2457 3 91deductedpursuantto26U.S.C.Section168oftheInternalRevenueCodeasamendedbythe
92JobCreationandWorkerAssistanceActof2002;
93 (8)ForalltaxyearsbeginningonorafterJanuary1,2005,theamountofanyincome
94receivedformilitaryservicewhilethetaxpayerservesinacombatzonewhichisincludedin
95federaladjustedgrossincomeandnototherwiseexcludedtherefrom.Asusedinthissection,
96"combatzone"meansanyareawhichthePresidentoftheUnitedStatesbyExecutiveOrder
97designatesasanareainwhichArmedForcesoftheUnitedStatesareorhaveengagedin
98combat.Serviceisperformedinacombatzoneonlyifperformedonorafterthedate
99designatedbythePresidentbyExecutiveOrderasthedateofthecommencingofcombat
100activitiesinsuchzone,andonorbeforethedatedesignatedbythePresidentbyExecutive
101Orderasthedateoftheterminationofcombatantactivitiesinsuchzone;
102 (9)ForalltaxyearsendingonorafterJuly1,2002,withrespecttoqualifiedproperty
103thatissoldorotherwisedisposedofduringataxableyearbyataxpayerandforwhichan
104additionalmodificationwasmadeundersubdivision(3)ofsubsection2ofthissection,the
105amountbywhichadditionalmodificationmadeundersubdivision(3)ofsubsection2ofthis
106sectiononqualifiedpropertyhasnotbeenrecoveredthroughtheadditionalsubtractions
107providedinsubdivision(7)ofthissubsection;
108 (10)ForalltaxyearsbeginningonorafterJanuary1,2014,theamountofany
109incomereceivedaspaymentfromanyprogramwhichprovidescompensationtoagricultural
110producerswhohavesufferedalossastheresultofadisasteroremergency,includingthe:
111 (a)LivestockForageDisasterProgram;
112 (b)LivestockIndemnityProgram;
113 (c)EmergencyAssistanceforLivestock,Honeybees,andFarm-RaisedFish;
114 (d)EmergencyConservationProgram;
115 (e)NoninsuredCropDisasterAssistanceProgram;
116 (f)Pasture,Rangeland,ForagePilotInsuranceProgram;
117 (g)AnnualForagePilotProgram;
118 (h)LivestockRiskProtectionInsurancePlan;
119 (i)LivestockGrossMarginInsurancePlan;
120 (11)ForalltaxyearsbeginningonorafterJanuary1,2018,anyinterestexpensepaid
121oraccruedinthecurrenttaxableyear,butnotdeductedasaresultofthelimitationimposed
122under26U.S.C.Section163(j),asamended.Forthepurposesofthissubdivision,aninterest
123expenseisconsideredpaidoraccruedonlyinthefirsttaxableyearthedeductionwouldhave
124beenallowableunder26U.S.C.Section163,asamended,ifthelimitationunder26U.S.C.
125Section163(j),asamended,didnotexist;
126 (12)Onehundredpercentofanyretirementbenefitsreceivedbyanytaxpayerasa
127resultofthetaxpayer'sserviceintheArmedForcesoftheUnitedStates,includingreserve
HB2457 4 128componentsandtheNationalGuardofthisstate,asdefinedin32U.S.C.Sections101(3)and
129109,andanyothermilitaryforceorganizedunderthelawsofthisstate;[and]
130 (13)Onehundredpercentofanyfederalgrantmoneysreceivedforthepurposeof
131providingorexpandingaccesstobroadbandinternettoareasofthestatedeemedtobelacking
132suchaccess; and
133 (14)ForalltaxyearsbeginningonorafterJanuary1,2022,theamountof
134specifiedresearchorexperimentalexpendituresthatarebothrequiredtobechargedto
135capitalaccountandactuallyarechargedtocapitalaccountasrequiredby26U.S.C.
136Section174(a)(2)(A),asamended,forthetaxyear,afteranyreductiontothatamount
137under26U.S.C.Section280C(c),asamended.
138 4.Thereshallbeaddedtoorsubtractedfromthetaxpayer'sfederaladjustedgross
139incomethetaxpayer'sshareoftheMissourifiduciaryadjustmentprovidedinsection143.351.
140 5.Thereshallbeaddedtoorsubtractedfromthetaxpayer'sfederaladjustedgross
141incomethemodificationsprovidedinsection143.411.
142 6.Inadditiontothemodificationstoataxpayer'sfederaladjustedgrossincomeinthis
143section,tocalculateMissouriadjustedgrossincomethereshallbesubtractedfromthe
144taxpayer'sfederaladjustedgrossincomeanygainrecognizedpursuantto26U.S.C.Section
1451033oftheInternalRevenueCodeof1986,asamended,arisingfromcompulsoryor
146involuntaryconversionofpropertyasaresultofcondemnationortheimminencethereof.
147 7.(1)Asusedinthissubsection,"qualifiedhealthinsurancepremium"meansthe
148amountpaidduringthetaxyearbysuchtaxpayerforanyinsurancepolicyprimarily
149providinghealthcarecoverageforthetaxpayer,thetaxpayer'sspouse,orthetaxpayer's
150dependents.
151 (2)Inadditiontothesubtractionsinsubsection3ofthissection,onehundredpercent
152oftheamountofqualifiedhealthinsurancepremiumsshallbesubtractedfromthetaxpayer's
153federaladjustedgrossincometotheextenttheamountpaidforsuchpremiumsisincludedin
154federaltaxableincome.Thetaxpayershallprovidethedepartmentofrevenuewithproofof
155theamountofqualifiedhealthinsurancepremiumspaid.
156 8.(1)BeginningJanuary1,2014,inadditiontothesubtractionsprovidedinthis
157section,onehundredpercentofthecostincurredbyataxpayerforahomeenergyaudit
158conductedbyanentitycertifiedbythedepartmentofnaturalresourcesundersection640.153
159ortheimplementationofanyenergyefficiencyrecommendationsmadeinsuchanauditshall
160besubtractedfromthetaxpayer'sfederaladjustedgrossincometotheextenttheamountpaid
161foranysuchactivityisincludedinfederaltaxableincome.Thetaxpayershallprovidethe
162departmentofrevenuewithasummaryofanyrecommendationsmadeinaqualifiedhome
163energyaudit,thenameandcertificationnumberofthequalifiedhomeenergyauditorwho
164conductedtheaudit,andproofoftheamountpaidforanyactivitiesunderthissubsectionfor
HB2457 5 165whichadeductionisclaimed.Thetaxpayershallalsoprovideacopyofthesummaryofany
166recommendationsmadeinaqualifiedhomeenergyaudittothedepartmentofnatural
167resources.
168 (2)Atnotimeshalladeductionclaimedunderthissubsectionbyanindividual
169taxpayerortaxpayersfilingcombinedreturnsexceedonethousanddollarsperyearfor
170individualtaxpayersorcumulativelyexceedtwothousanddollarsperyearfortaxpayers
171filingcombinedreturns.
172 (3)Anydeductionclaimedunderthissubsectionshallbeclaimedforthetaxyearin
173whichthequalifiedhomeenergyauditwasconductedorinwhichtheimplementationofthe
174energyefficiencyrecommendationsoccurred.Ifimplementationoftheenergyefficiency
175recommendationsoccurredduringmorethanoneyear,thedeductionmaybeclaimedinmore
176thanoneyear,subjecttothelimitationsprovidedundersubdivision(2)ofthissubsection.
177 (4)Adeductionshallnotbeclaimedforanyotherwiseeligibleactivityunderthis
178subsectionifsuchactivityqualifiedforandreceivedanyrebateorotherincentivethrougha
179state-sponsoredenergyprogramorthroughanelectriccorporation,gascorporation,electric
180cooperative,ormunicipallyownedutility.
181 9.Theprovisionsofsubsection8ofthissectionshallexpireonDecember31,2020.
182 10.(1)Asusedinthissubsection,thefollowingtermsmean:
183 (a)"Beginningfarmer",ataxpayerwho:
184 a.HasfiledatleastonebutnotmorethantenInternalRevenueServiceScheduleF
185(Form1040)ProfitorLossFromFarmingformssinceturningeighteenyearsofage;
186 b.IsapprovedforabeginningfarmerloanthroughtheUSDAFarmServiceAgency
187BeginningFarmerdirectorguaranteedloanprogram;
188 c.Hasafarmingoperationthatisdeterminedbythedepartmentofagriculturetobe
189newproductionagriculturebutistheprincipaloperatorofafarmandhassubstantialfarming
190knowledge;or
191 d.Hasbeendeterminedbythedepartmentofagriculturetobeaqualifiedfamily
192member;
193 (b)"Farmowner",anindividualwhoownsfarmlandanddisposesoforrelinquishes
194useofallorsomeportionofsuchfarmlandasfollows:
195 a.Asaletoabeginningfarmer;
196 b.Aleaseorrentalagreementnotexceedingtenyearswithabeginningfarmer;or
197 c.Acrop-sharearrangementnotexceedingtenyearswithabeginningfarmer;
198 (c)"Qualifiedfamilymember",anindividualwhoisrelatedtoafarmownerwithin
199thefourthdegreebyblood,marriage,oradoptionandwhoispurchasingorleasingorisina
200crop-sharearrangementforlandfromalloraportionofsuchfarmowner'sfarmingoperation.
HB2457 6 201 (2)(a)Inadditiontoallothersubtractionsauthorizedinthissection,ataxpayerwho
202isafarmownerwhosellsalloraportionofsuchfarmlandtoabeginningfarmermaysubtract
203fromsuchtaxpayer'sMissouriadjustedgrossincomeanamounttotheextentincludedin
204federaladjustedgrossincomeasprovidedinthissubdivision.
205 (b)Subjecttothelimitationsinparagraph(c)ofthissubdivision,theamountthatmay
206besubtractedshallbeequaltotheportionofcapitalgainsreceivedfromthesaleofsuch
207farmlandthatsuchtaxpayerreceivesinthetaxyearforwhichsuchtaxpayersubtractssuch
208capitalgain.
209 (c)Ataxpayermaysubtractthefollowingamountsandpercentagespertaxyearin
210totalcapitalgainsreceivedfromthesaleofsuchfarmlandunderthissubdivision:
211 a.Forthefirsttwomilliondollarsreceived,onehundredpercent;
212 b.Forthenextonemilliondollarsreceived,eightypercent;
213 c.Forthenextonemilliondollarsreceived,sixtypercent;
214 d.Forthenextonemilliondollarsreceived,fortypercent;and
215 e.Forthenextonemilliondollarsreceived,twentypercent.
216 (d)Thedepartmentofrevenueshallprepareanannualreportreviewingthecostsand
217benefitsandcontainingstatisticalinformationregardingthesubtractionofcapitalgains
218authorizedunderthissubdivisionfortheprevioustaxyearincluding,butnotlimitedto,the
219totalamountofallcapitalgainssubtractedandthenumberoftaxpayerssubtractingsuch
220capitalgains.SuchreportshallbesubmittedbeforeFebruaryfirstofeachyeartothe
221committeeonagriculturepolicyoftheMissourihouseofrepresentativesandthecommittee
222onagriculture,foodproductionandoutdoorresourcesoftheMissourisenate,orthesuccessor
223committees.
224 (3)(a)Inadditiontoallothersubtractionsauthorizedinthissection,ataxpayerwho
225isafarmownerwhoentersaleaseorrentalagreementforalloraportionofsuchfarmland
226withabeginningfarmermaysubtractfromsuchtaxpayer'sMissouriadjustedgrossincomean
227amounttotheextentincludedinfederaladjustedgrossincomeasprovidedinthis
228subdivision.
229 (b)Subjecttothelimitationinparagraph(c)ofthissubdivision,theamountthatmay
230besubtractedshallbeequaltotheportionofcashrentincomereceivedfromtheleaseor
231rentalofsuchfarmlandthatsuchtaxpayerreceivesinthetaxyearforwhichsuchtaxpayer
232subtractssuchincome.
233 (c)Notaxpayershallsubtractmorethantwenty-fivethousanddollarspertaxyearin
234totalcashrentincomereceivedfromtheleaseorrentalofsuchfarmlandunderthis
235subdivision.
236 (4)(a)Inadditiontoallothersubtractionsauthorizedinthissection,ataxpayerwho
237isafarmownerwhoentersacrop-sharearrangementonalloraportionofsuchfarmlandwith
HB2457 7 238abeginningfarmermaysubtractfromsuchtaxpayer'sMissouriadjustedgrossincomean
239amounttotheextentincludedinfederaladjustedgrossincomeasprovidedinthis
240subdivision.
241 (b)Subjecttothelimitationinparagraph(c)ofthissubdivision,theamountthatmay
242besubtractedshallbeequaltotheportionofincomereceivedfromthecrop-share
243arrangementonsuchfarmlandthatsuchtaxpayerreceivesinthetaxyearforwhichsuch
244taxpayersubtractssuchincome.
245 (c)Notaxpayershallsubtractmorethantwenty-fivethousanddollarspertaxyearin
246totalincomereceivedfromtheleaseorrentalofsuchfarmlandunderthissubdivision.
247 (5)Thedepartmentofagricultureshall,byrule,establishaprocesstoverifythata
248taxpayerisabeginningfarmerforpurposesofthissectionandshallprovideverificationto
249thebeginningfarmerandfarmsellerofsuchfarmer'sandseller'scertificationand
250qualificationfortheexemptionprovidedinthissubsection.
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