COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:3392S.10T Bill No.:Truly Agreed To and Finally Passed SS#2 for SB 872 Subject:Taxation and Revenue - Income; Utilities; Taxation and Revenue - Sales and Use Type:Original Date:June 4, 2024Bill Summary:This proposal modifies provisions relating to the taxation of utility
infrastructure.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2025FY 2026FY 2027
General Revenue($8,205,810 to
$25,530,845)
Could exceed
($5,284,300 to
$28,284,347)
Could exceed
($5,284,300 to
$28,284,347)
Total Estimated Net
Effect on General
Revenue
($8,205,810 to
$25,530,845)
Could exceed
($5,284,300 to
$28,284,347)
Could exceed
($5,284,300 to
$28,284,347)
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2025FY 2026FY 2027School District Trust
Fund (0688)
($1,321,075 to
$7,096,087)
($1,761,433 to
$9,461,449)
($1,761,433 to
$9,461,449)
Conservation
Commission Fund
(0609)
($165,134 to
$887,011)
($220,179 to
$1,182,681)
($220,179 to
$1,182,681)
Parks and Soils State
Sales Tax Funds
(0613 & 0614)
($132,107 to
$709,609)
($176,143 to
$946,145)
($176,143 to
$946,145)
Total Estimated Net
Effect on Other State
Funds
($1,618,316 to
$8,692,707)
($2,157,755 to
$11,590,275)
($2,157,755 to
$11,590,275)
Numbers within parentheses: () indicate costs or losses. L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 2 of
June 4, 2024
KLP:LR:OD
ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2025FY 2026FY 2027Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2025FY 2026FY 2027Total 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 2025FY 2026FY 2027Local GovernmentCould exceed
($8,349,194 to
$44,847,269)
Could exceed
($11,132,258 to
$59,796,358)
Could exceed
($11,132,258 to
$59,796,358) L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 3 of
June 4, 2024
KLP:LR:OD
FISCAL ANALYSIS
ASSUMPTION
Section 67.2677 - Video Service Providers
Officials from the Department of Revenue (DOR) note Video Service Provider fees are paid
directly to the local political subdivisions and not DOR. Therefore, these sections will not
fiscally impact DOR.
Officials from the City of Kansas City assume this provision has a negative fiscal impact as it
limits the City's ability to tax streaming services amid dwindling cable revenues. The revenue
derived pays for City right of way maintenance.
Oversight assumes this proposal may create a fiscal impact to local political subdivisions that
collect the franchise entity fee in Section 67.2689, as that fee utilizes the “video service”
definition, which is being amended by this bill. Oversight will reflect a $0 to potential unknown
revenue and potential unknown loss to local political subdivisions.
Section 67.5122 - Uniform Small Wireless Facility Deployment Act
Officials from the Department of Revenue (DOR) note Video Service Provider fees are paid
directly to the local political subdivisions and not DOR. Therefore, these sections will not
fiscally impact DOR.
In response to a similar proposal, SB 1411 (2024), officials from the City of Kansas City
assumed the proposed legislation would have a negative fiscal impact of an indeterminate
amount.
Oversight assumes this proposal removes the expiration date (January 1, 2025) of the act and
allows the continuation of §§67.5110 to 67.5121 which is intended to encourage and streamline
the deployment of small wireless facilities. Oversight will reflect a potential negative unknown
fiscal impact to local political subdivisions for this proposal based on the response from the City
of Kansas City.
Section 143.121 - Subtraction for Broadband Grants
Officials from the Department of Revenue (DOR) note in 2023, the General Assembly adopted
SB 25, that allowed a subtraction from federal adjusted gross income of 100% of the amount of
money received from a federal grant expanding broadband across the state. That proposal was
effective August 28, 2023, and the fiscal note assumed that all grant money awarded in 2023 was
allowed the subtraction. The first change in this proposal is to allow the subtraction to be
retroactive to January 1, 2022. L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 4 of
June 4, 2024
KLP:LR:OD
This proposal would become effective on August 28, 2023, but makes this tax subtraction
retroactively applicable to tax years beginning on or after January 1, 2022. This fiscal note will
show the impact for tax year 2022 grants. DOR assume that the companies will all amend their
returns beginning August 28, 2024, the effective date of this proposal, therefore, the fiscal impact
will all occur in FY 2025.
In 2022, DOR notes that the corporate tax rate was 4% while the rate for the pass-through
entities was 5.3%. In the fiscal note for SB 25, DOR provided the following information on the
number of grants distributed in Missouri.
Table 1: Estimated Taxable GrantsTax YearFederal Grants2019$22,716,387 2020$121,174,813 2021$30,805,895 2022$86,151,208 2023$356,005,895
DOR also noted that based on research of award amounts, 28.9% of the grant awards go to
corporations and 71.1% go to the pass-through entities. DOR assumed the distribution of the
grants per entity type.
Table 2: Estimated Taxable Grants by Entity
Type
Tax
Year
Corporate
Awards
Pass-Through
Awards
2019$6,560,151 $16,156,236 2020$34,993,464 $86,181,350 2021$8,896,279 $21,909,616 2022$24,879,173 $61,272,035 2023$102,809,148 $253,196,747
Therefore, when these organizations file their amended return in FY 2025, it will result in an
additional loss to the state of $4,242,585 [($24,879,173 corporate grants x 4.0%) + ($61,272,035
pass-through grants x 5.3%)].
Additionally, this proposal expands the subtraction to state and local grants as well. DOR is
unaware of any broadband grants that are distributed by the state or local governments. The only
grants DOR knows of are distributed by the state on behalf of the federal government. DOR
notes that should the state or a local political subdivision be handing out any grants for
broadband purposes, those grants would be allowed the subtraction and the cost of this fiscal
note will be higher than estimated. L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 5 of
June 4, 2024
KLP:LR:OD
This will require DOR to update their instructions for the MO-1040 and the MO-A forms at a
cost of $7,138. This will also require the department’s computer program and exception review
program to be updated at a cost of $10,000.
Oversight assumes the Department of Revenue is provided with core funding to handle a certain
amount of activity each year. Oversight assumes DOR could absorb the administrative costs
related to this proposal. If multiple bills pass which require additional staffing and duties at
substantial costs, DOR could request funding through the appropriation process.
Officials from the Office of Administration - Budget and Planning (B&P) note this proposal
would expand the income tax exemption for federal broadband grants to include state and local
grants. This proposal would also begin the income subtraction for all tax years starting with
2022.
B&P notes that SB 25 (2023), which authorized a subtraction for federal grants, became effective
August 18, 2023. The estimated impact for SB 25 included the assumption that all grants
received during tax year 2023 would be exempted. Therefore, this proposal would only add
grants received during 2022 to the exemption.
In the fiscal response for SB 25, B&P included information on federal grants received in
Missouri during tax year 2022.
Table 1: Estimated
Taxable Grants
Tax
Year
Federal
Grants
2019$22,716,387 2020$121,174,813 2021$30,805,895 2022$86,151,208 2023$356,005,895
In addition, based on historic award data, B&P estimated that approximately 28.9% of awards go
to corporations and 71.1% go to pass-through entities. L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 6 of
June 4, 2024
KLP:LR:OD
Table 2: Estimated Taxable Grants
by Entity TypeTax
Year
Corporate
Awards
Pass-
Through
Awards
2019$6,560,151 $16,156,236 2020$34,993,464 $86,181,350 2021$8,896,279 $21,909,616 2022$24,879,173 $61,272,035 2023$102,809,148 $253,196,747
B&P notes that subtractions do not reduce revenues on a dollar-for-dollar basis, but rather in
proportion to the top tax rate applied. For tax year 2022, the corporate tax rate was 4.0% and the
pass-through business tax rate was 5.3%.
B&P notes that this proposal would not become effective until August 28, 2024 (i.e., FY25).
B&P assumes that impacted businesses would have to amend their tax year 2022 tax returns to
subtract any eligible broadband grant income. For the purpose of this fiscal note, B&P will
assume that all eligible companies amend their tax year 2022 returns during FY25.
Based on the above information, B&P estimates that this proposal could reduce TSR and GR by
$4,242,585 [($24,879,173 corporate grants x 4.0%) + ($61,272,035 pass-through grants x 5.3%)]
in FY25.
This proposal would also expand the subtraction to include any state and local grants. B&P is
unaware of any state or local only grants that have been awarded since FY20 that are not simply
passing on federal grant money. Therefore, this expansion could reduce TSR and GR by an
unknown amount beginning in FY25.
Oversight notes officials from B&P and DOR both assume the proposal will have a direct fiscal
impact on state revenues. Oversight does not have any information to the contrary. Therefore,
Oversight will reflect DOR’s and B&P’s estimated impact in the fiscal note for FY 2025.
Oversight notes this proposal expands the subtraction to grants distributed by state and local
governments. DOR and B&P both note the only grants currently distributed are distributed by
the federal government. Should a local or state grant be distributed and a subsequent subtraction
issued in the future, there would be a negative impact on general revenue. Oversight is unable to
quantify future local grant disbursements. Therefore, Oversight will show a potential unknown
negative fiscal impact beginning in FY 2026. L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 7 of
June 4, 2024
KLP:LR:OD
Section 144.058 - Electricity Production Equipment Sales Tax Exemption
Officials from the Department of Revenue (DOR) note this proposal creates an exemption for
electrical energy and gas, water, coal, and energy sources, chemicals, machinery, equipment,
parts and materials used and consumed in the generation, transmission, distribution, sale, or
furnishing of electricity for light, heat, or power to customers. It assumes that “parts and
materials” would exempt most of the inputs to production of the utilities. This exemption is
from both the state and local sales and use taxes.
The Current Sales and Use tax rate is 4.225%
General Revenue is 3%
School District Trust Fund is 1%
Conservation Commission Fund is .125%
Parks, Soil & Water Funds .1%
For fiscal note purposes, the Department is using a weighted local tax rate of 6.32% to calculate
the average local sales tax loss. In an effort to more accurately reflect the estimated local impact,
B&P and DOR have moved from a population weighted average local sales tax rate to a location
weighted average local sales tax rate. This change was made to reflect where sales actually
occur, rather than exclusively where people live.
This proposal would become effective on August 28, 2024. It should be noted that sales tax is
remitted one month behind collections and therefore, this will have an impact of 9 months in the
first year (FY 2025).
Using information from the DOR’s taxable sales and use tax database the following amount of
sales and use tax was collected in CY 2022 (the most recent complete year of data).
Method 1 - Lower Bound EstimatesTax TypeNAICS DescriptionCY 2022PercentUse221111Hydroelectric Power Generation $80,693,907 100%
Use221112Fossil Fuel Electric Power Generation $0 100%
Use221113Nuclear Electric Power Generation $0 100%Use221114Solar Electric Power Generation$0 100%Use221115Wind Electric Power Generation $0 100%Use221116Geothermal Electric Power Generation $0 100%Use221117Biomass Electric Power Generation $0 100%Use221118Other Electric Power Generation $0 100%
Use221121Electric Bulk Power Transmission And Control $22,903,661 100%
Use221122Electric Power Distribution $47,214,765 100%Sales332216Saw Blade and Handtool Manufacturing $0 10% L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 8 of
June 4, 2024
KLP:LR:OD
Sales333318
Other Commercial and Service Industry
Machinery Manufacturing
$0 60%Sales333992
Welding And Soldering Equipment
Manufacturing
$59,096 60%Sales335311
Power, Distribution, and Specialty Transformer
Manufacturing
$16,252,299 100%Sales335313
Switchgear and Switchboard Apparatus
Manufacturing
$0 100%
Sales335314Relay And Industrial Control Manufacturing $85,592 100%Sales335931Current-Carrying Wiring Device Manufacturing $1,947,606 100%
Sales335932
Noncurrent-Carrying Wiring Device
Manufacturing
$0 100%
Sales335991Carbon and Graphite Product Manufacturing $0 100%
Sales335999
All Other Miscellaneous Electrical Equipment
and Component Manufacturing
$6,986,402 15%
Total Exempt Sales$176,143,328
This would result in a loss to total state revenue of $7,442,056. The Department notes that this
method of estimation may not capture all the taxable sales that could become exempt under this
proposal. DOR notes this may be the lower range of projected loss.
In order to calculate an upper range, the Department utilized the US BEA Input-Output Use
Tables. According to the Input-Output Use Tables, inputs from commodities that might qualify
under these exemptions are roughly 25.0% of the total output of the “utilities” industry. The
Department’s report indicates that taxable sales of electric related utilities in 2022 were about
$4,423,581,612. This suggests that this proposal might exempt $946,144,910 in taxable sales
from taxation.
Method 2 - Upper Bound EstimateNAICS DescriptionCY 2022221111Hydroelectric Power Generation $2,166,432,647
221112
Fossil Fuel Electric Power
Generation
$46,324,776
221113Nuclear Electric Power Generation $0 221114Solar Electric Power Generation$0 221115Wind Electric Power Generation $0
221116
Geothermal Electric Power
Generation
$0
221117Biomass Electric Power Generation $0 221118 Other Electric Power Generation $0
221121
Electric Bulk Power Transmission
And Control
$34,077,659
221122Electric Power Distribution $2,176,746,529 L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 9 of
June 4, 2024
KLP:LR:OD
Total Sales$4,423,581,612
BEA Input/Output Adjustment
21.4%
Total Exempt Sales$946,144,910
Using this method, it could reduce total state revenue by $39,974,592 ($946,144,190 x 4.225%).
The Department notes this method could be overestimating the impact. Therefore, DOR will
show the impact as a range between the estimates.
Table 3: State Impacts By FundFY 2025FY 2026+
Fund
LowHighLowHigh
GR($3,963,225)($21,288,260)($5,284,300)($28,384,347)
Education($1,321,075)($7,096,087)($1,761,433)($9,461,449)Conservation($165,134)($887,011)($220,179)($1,182,681)DNR($132,107)($709,609)($176,143)($946,145)
TSR Impact($5,581,541)($29,980,967)($7,442,055)($39,974,622)
Locals($8,349,194)($44,847,269)($11,132,258)($59,796,358)
This proposal will require updates to the department’s website and computer system. These
changes are estimated at $8,923.
Oversight assumes the Department of Revenue is provided with core funding to handle a certain
amount of activity each year. Oversight assumes DOR could absorb the administrative costs
related to this proposal. If multiple bills pass which require additional staffing and duties at
substantial costs, DOR could request funding through the appropriation process.
Officials from the Office of Administration - Budget and Planning (B&P) note this proposal
exempts from state sales and use tax various inputs to the utilities industry beginning August 28,
2024. These exemptions include the utilities, chemicals, machinery, equipment, supplies, parts
and materials used by that industry. B&P notes that this proposal would also exempt such
products from local sales taxes.
B&P assumes that the broad terms “parts and materials” exempt most inputs to production for
the utilities. L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 10 of 17
June 4, 2024
KLP:LR:OD
Lower Estimated Impact
DOR reports taxable sales in 2022 from various electrical utility related industries as shown
below. Based on the taxable sales / use data below, B&P estimates that this provision could
reduce taxable sales by $176,143,328 annually.
Method 1 - Lower Bound EstimatesTax
Type
NAICSDescriptionCY 2022Percent
Use221111Hydroelectric Power Generation $80,693,907 100%
Use221112Fossil Fuel Electric Power Generation $0 100%
Use221113Nuclear Electric Power Generation $0 100%Use221114Solar Electric Power Generation$0 100%Use221115Wind Electric Power Generation $0 100%Use221116Geothermal Electric Power Generation $0 100%Use221117Biomass Electric Power Generation $0 100%Use221118Other Electric Power Generation $0 100%
Use221121
Electric Bulk Power Transmission and
Control
$22,903,661 100%
Use221122Electric Power Distribution $47,214,765 100%Sales332216Saw Blade and Handtool Manufacturing $0 10%
Sales333318
Other Commercial and Service Industry
Machinery Manufacturing
$0 60%Sales333992
Welding And Soldering Equipment
Manufacturing
$59,096 60%Sales335311
Power, Distribution, And Specialty
Transformer Manufacturing
$16,252,299 100%Sales335313
Switchgear And Switchboard Apparatus
Manufacturing
$0 100%
Sales335314Relay And Industrial Control Manufacturing $85,592 100%
Sales335931
Current-Carrying Wiring Device
Manufacturing
$1,947,606 100%Sales335932
Noncurrent-Carrying Wiring Device
Manufacturing
$0 100%Sales335991
Carbon And Graphite Product
Manufacturing
$0 100%Sales335999
All Other Miscellaneous Electrical
Equipment and Component Manufacturing
$6,986,402 15%
Total Exempt Sales$176,143,328
Based on this information, B&P estimates that this proposal could reduce TSR by $7,442,055
($176,143,328 x 4.225%) and GR by $5,284,300 ($176,143,328 x 3.0%) annually. Using the L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 11 of 17
June 4, 2024
KLP:LR:OD
location* weighted average local sales tax rate of 6.32% for 2023, B&P further estimates that
this provision could reduce local sales tax collections by $ $11,132,258 annually.
*In an effort to more accurately reflect the estimated local impact, B&P and DOR have moved
from a population weighted average local sales tax rate to a location weighted average local sales
tax rate. This change was made to reflect where sales actually occur, rather than exclusively
where people live.
B&P notes, however, that this method of estimation likely does not capture all the taxable sales
that would become exempt under this proposal, and that this impact reflects the bottom of the
range for the decrease in revenue.
Higher Estimated Impact
In order to determine an upper-bound estimate for the reduction to state revenues, B&P utilized
the US BEA Input-Output Use Tables
1
. According to the Input-Output Use Tables, inputs from
commodities that might qualify under these exemptions are roughly 21.4% of the total output of
the “utilities” industry. In addition, DOR reports that taxable sales of electric related utilities in
2022 were about $4,423,581,612. This suggests that this proposal might exempt $946,144,910
in taxable sales from taxation.
Method 2 - Upper Bound EstimateNAICSDescriptionCY 2022221111Hydroelectric Power Generation $2,166,432,647
221112
Fossil Fuel Electric Power
Generation
$46,324,776 221113
Nuclear Electric Power
Generation
$0
221114Solar Electric Power Generation$0 221115Wind Electric Power Generation $0
221116
Geothermal Electric Power
Generation
$0 221117
Biomass Electric Power
Generation
$0 221118
Other Electric Power
Generation
$0 221121
Electric Bulk Power
Transmission and Control
$34,077,659
221122Electric Power Distribution $2,176,746,529 Total Sales$4,423,581,612 BEA Input/Output Adjustment21.4%
1
http://www.bea.gov/industry/io_annual.htm L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 12 of 17
June 4, 2024
KLP:LR:OD
Total Exempt Sales$946,144,910
B&P estimates that this could reduce TSR by $39,974,622 ($946,144,910 x 4.225%) and GR by
$28,384,347 ($946,144,910 x 3.0%) annually. Using the location* weighted average local sales
tax rate of 6.32% for 2023, B&P further estimates that this provision could reduce local sales tax
collections by $ $59,796,358 annually.
*In an effort to more accurately reflect the estimated local impact, B&P and DOR have moved
from a population weighted average local sales tax rate to a location weighted average local sales
tax rate. This change was made to reflect where sales actually occur, rather than exclusively
where people live.
B&P notes, however, that this method may overestimate the true reduction to state revenues by
including items that would not become tax exempt under this proposal.
Summary
Therefore, using both the taxable sales reports provided by DOR and the US BEA Input-Output
Use Tables, B&P estimates that this proposal could reduce TSR by $7,442,055 to $39,974,622
annually and GR by $5,284,300 to $28,384,347 once fully implemented in FY26. This proposal
could also reduce local sales tax collections by $11,132,258 to $59,796,358 annually.
Table 3: Estimated Impacts by Fund FY 2025FY 2026+State FundsLowHighLowHighGR($3,963,225)($21,288,260)($5,284,300)($28,384,347)Education($1,321,075)($7,096,087)($1,761,433)($9,461,449)Conservation($165,134)($887,011)($220,179)($1,182,681)DNR($132,107)($709,609)($176,143)($946,145)TSR Impact($5,581,541)($29,980,967)($7,442,055)($39,974,622) Local Funds Local Sales
Tax($8,349,194)($44,847,269)($11,132,258)($59,796,358)
Oversight notes the effective sales tax rate for local political subdivision is estimated at 4.3%
based on the Taxable Sales for the Entire State for FY 2022 ($97,642,125,269) and the Sales Tax
Distribution to local political subdivisions for FY 2022 ($4,226,659,429). Using a sales tax rate
of 4.3% and the taxable sales provided by DOR and B&P, Oversight estimates a loss of revenue
for local political subdivisions as noted below: L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 13 of 17
June 4, 2024
KLP:LR:OD
FY 2025 (9 Months)FY 2026+
Fund
LowHighLowHigh
Locals($2,890,689)($30,513,173)($7,574,163)($40,684,231)
For the purpose of this fiscal note, Oversight
sales tax rate provided by B&P. If the weighted local sales tax rate provided by B&P is
inaccurate, this would change the impact presented in this fiscal note.
Officials from the City of Kansas City assume this provision will have a negative fiscal impact
of an indeterminate amount.
Responses regarding the proposed legislation as a whole
Officials from the Morgan County Pwsd #2 assume a fiscal impact of an indeterminate amount.
Officials from the Callaway County SB 40 Board assume a fiscal impact of an indeterminate
amount.
Officials from the Metropolitan St. Louis Sewer District - 7B Sewer assume a fiscal impact of
an indeterminate amount.
Officials from the Department of Natural Resources defer to the Department of Revenue for
the potential fiscal impact of this proposal.
Officials from the Missouri Department of Conservation assume an unknown fiscal impact.
The Conservation Sales Tax funds are derived from one-eighth of one percent sales and use tax
pursuant to Article IV Section 43 (a) of the Missouri Constitution. The Department defers to the
Department of Revenue as it is responsible for tax collection and would be better able to estimate
the anticipated fiscal impact that would result from this proposal.
Officials from the Department of Commerce and Insurance, Missouri Department of
AgricultureMissouri Department of Transportation, Office of Administration and the
Department of Economic Development
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.
Officials from the Phelps County Sheriff, Kansas City Police Dept., Sheriff's Retirement
System, South River Drainage District - 7D LeveeCity of O’Fallon, Branson Police
Department, St Louis County Police Department, County Employees Retirement Fund
(CERF), Kansas City Civilian Police Employees' Retirement, Kansas City Police
Retirement System, Kansas City Public School Retirement System, St. Charles County
Pwsd #2 - 7A Water, Wayne County Pwsd #2, Missouri House of Representatives, Missouri L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 14 of 17
June 4, 2024
KLP:LR:OD
Senate, State Tax Commission, and the Public Education Employees' Retirement System
(PSRS/PEERS) each assume the proposal will have no fiscal impact on their respective
organizations. Oversight does not have any information to the contrary. Therefore, Oversight
will reflect a zero impact in the fiscal note for these agencies.
Oversight only reflects the responses received from state agencies and political subdivisions;
however, other cities and counties were requested to respond to this proposed legislation but did
not. A listing of political subdivisions included in the Missouri Legislative Information System
(MOLIS) database is available upon request.
FISCAL IMPACT – State GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027GENERAL REVENUERevenue Reduction - §143.121 -
Broadband Grant Subtraction - pp. (3-6)($4,242,585)
$0 or
(Unknown)
$0 or
(Unknown)
Revenue Reduction - §144.058 -
Sales/Use Tax exemption for
production of electricity - pp. (6-12)
($3,963,225 to
$21,288,260)
($5,284,300 to
$28,284,347)
($5,284,300 to
$28,284,347)
ESTIMATED NET EFFECT ON
GENERAL REVENUE
($8,205,810 to
$25,530,845)
Could exceed
($5,284,300 to
$28,284,347)
Could exceed
($5,284,300 to
$28,284,347)
SCHOOL DISTRICT TRUST FUND
(0688)
Revenue Reduction - §144.058 -
Sales/Use Tax exemption for
production of electricity - pp. (6-12)
($1,321,075 to
$7,096,087)
($1,761,433 to
$9,461,449)
($1,761,433 to
$9,461,449)
ESTIMATED NET EFFECT ON
SCHOOL DISTRICT TRUST FUND
($1,321,075 to
$7,096,087)
($1,761,433 to
$9,461,449)
($1,761,433 to
$9,461,449) L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 15 of 17
June 4, 2024
KLP:LR:OD
FISCAL IMPACT – State GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027CONSERVATION COMMISSION
FUND (0609)
Revenue Reduction - §144.058 -
Sales/Use Tax exemption for
production of electricity - pp. (6-12)
($165,134 to
$887,011)
($220,179 to
$1,182,681)
($220,179 to
$1,182,681)
ESTIMATED NET EFFECT ON
CONSERVATION COMMISSION
FUND
($165,134 to
$887,011)
($220,179 to
$1,182,681)
($220,179 to
$1,182,681)
PARKS AND SOILS STATE SALES
TAX FUNDS (0613 & 0614)
Revenue Reduction - §144.058 -
Sales/Use Tax exemption for
production of electricity - pp. (6-12)
($132,107 to
$709,609)
($176,143 to
$946,145)
($176,143 to
$946,145)
ESTIMATED NET EFFECT ON
PARKS AND SOILS STATE SALES
TAX FUNDS
($132,107 to
$709,609)
($176,143 to
$946,145)
($176,143 to
$946,145)
FISCAL IMPACT – Local GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027LOCAL POLITICAL
SUBDIVISIONS
Revenue/Loss - §67.2677 - potential
Video Service Provider Fees change
from definition change to “video
service” - p. (3)
$0 or
(Unknown) to
Unknown
$0 or
(Unknown) to
Unknown
$0 or
(Unknown) to
Unknown
Cost – §67.5122 - extends sunset date
on small wireless facilities - p. (3)
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown) L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 16 of 17
June 4, 2024
KLP:LR:OD
FISCAL IMPACT – Local GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027Revenue Reduction - §144.058 -
Sales/Use Tax exemption for
production of electricity - pp. (6-12)
($8,349,194 to
$44,847,269)
($11,132,258 to
$59,796,358)
($11,132,258 to
$59,796,358)
ESTIMATED NET EFFECT TO
LOCAL POLITICAL
SUBDIVISIONS
Could exceed
($8,349,194 to
$44,847,269)
Could exceed
($11,132,258 to
$59,796,358)
Could exceed
($11,132,258 to
$59,796,358)
FISCAL IMPACT – Small Business
Certain utility companies could be impacted by this proposal.
FISCAL DESCRIPTION
This act modifies provisions relating to the taxation of utility infrastructure.
VIDEO SERVICE PROVIDERS
This act modifies the definition of "video service" to include the provision of video programming
by a video service provider provided through wireline facilities located in a public right-of-way
without regard to the delivery technology. "Video service" does not include any video
programming accessed via a service that enables users to access content over the internet,
including streaming content. (Section 67.2677)
WIRELESS FACILITIES
This act extends the sunset date of the Uniform Small Wireless Facility Deployment Act from
January 1, 2025, to December 31, 2029. (Section 67.5122)
BROADBAND GRANT DEDUCTION
Current law authorizes a taxpayer to claim an income tax deduction for 100% of federal grant
moneys received for the purpose of providing or expanding access to broadband internet to areas
of the state deemed to be lacking such access. This act modifies such deduction to also allow it to
be taken for state and local grant moneys received. (Section 143.121)
SALES TAX EXEMPTION FOR UTILITIES
This act creates a state and local sales tax exemption for utilities, equipment, and materials used
to generate or transmit electricity. A public utility realizing savings as a result of this exemption
shall provide the Public Service Commission information on the amount of savings realized and L.R. No. 3392S.10T
Bill No. Truly Agreed To and Finally Passed SS#2 for SB 872
Page 17 of 17
June 4, 2024
KLP:LR:OD
shall include a statement that such savings will be passed through to the public utility's rate
determined in the public utility's next general rate proceeding. (Section 144.058)
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Office of Administration - Budget and Planning
Department of Commerce and Insurance
Department of Economic Development
Department of Revenue
Missouri Department of Agriculture
Missouri Department of Transportation
Department of Natural Resources
Morgan County Pwsd #2
Callaway County SB 40 Board
Metropolitan St. Louis Sewer District - 7B Sewer
City of Kansas City
Phelps County Sheriff
Kansas City Police Dept.
Sheriff's Retirement System
South River Drainage District - 7D Levee
City of O’Fallon
Branson Police Department
St Louis County Police Department
County Employees Retirement Fund (CERF)
Kansas City Civilian Police Employees' Retirement
Kansas City Police Retirement System
Kansas City Public School Retirement System
St. Charles County Pwsd #2 - 7A Water
Wayne County Pwsd #2
Missouri House of Representatives
Missouri Senate
State Tax Commission
Public Education Employees' Retirement System (PSRS/PEERS)
Julie MorffRoss StropeDirectorAssistant DirectorJune 4, 2024June 4, 2024