HCSHB235--TAXCREDITSFORINVESTMENTSINMISSOURICOMMUNITIES
SPONSOR: Gallick
COMMITTEEACTION:Voted"DoPasswithHCS"bytheStanding
CommitteeonHigherEducationandWorkforceDevelopmentbyavote
of11to0.
ThefollowingisasummaryoftheHouseCommitteeSubstituteforHB
235.
Thisbillcreatesthe"MissouriAngelInvestmentIncentiveAct".
ForalltaxyearsbeginningonorafterJanuary1,2026,thisbill
allowsaninvestortoclaimataxcreditinanamountequalto40%
oftheinvestor’sinvestmentinthequalifiedsecuritiesofa
qualifiedMissouribusiness,or50%oftheinvestor'sinvestmentif
thequalifiedMissouribusinessislocatedinaruralcounty,
definedinthebillascountiescontaining100,000residentsor
less.
Iftheamountofthetaxcreditexceedstheinvestor’stax
liabilityinanyonetaxyear,thecreditcanbecarriedforward
foruptofivesubsequenttaxyears.Noinvestorwillreceivemore
than$75,000intaxcreditsinasingleyearforcontributionstoa
singlequalifiedMissouribusiness,orreceivemorethan$300,000
intaxcreditsintotalinasingletaxyear.Ataxcreditcanbe
transferredbyaqualifiedinvestor. Thetotalamountoftax
creditsauthorizedinasingletaxyearbytheMissouriTechnology
Corporation(MTC)mustnotexceed$6millionforthe2026and2027
calendaryears.Thereafter,themaximumamountoftaxcreditsthat
canbeauthorizedwillbeincreasedannuallyby20%,providedthat
themaximumamountoftaxcreditswasauthorizedintheprevious
year.
TobedesignatedasaqualifiedMissouribusiness,abusinessmust
applytotheMTC,asspecifiedinthebill.Thedesignationofa
businessasaqualifiedMissouribusinesswillbemadeannuallyby
theMTC.Inadditiontootherrequirementsspecifiedinthebill,
aqualifiedMissouribusinessmustnothavehadannualgross
revenuesofmorethan$5millioninthemostrecenttaxyearofthe
business,andthebusinessmustnothavebeeninoperationlonger
thanfiveyearsifthebusinessisnotabiosciencebusiness,or
longerthan10yearsifthebusinessisabiosciencebusiness.
EachbusinessthathasbeenallocatedtaxcreditsbytheMTCmust
submitareportcontainingcertaininformationtotheMTCbefore
thetaxcreditsareissued. TheStateofMissouriwillnotbeheldliableforanydamagestoan
investorthatmakesaninvestmentinanyqualifiedsecurityofa
qualifiedMissouribusiness,anybusinessthatappliestobea
qualifiedMissouribusinessbutisturneddown,oranyinvestor
thatmakesaninvestmentinabusinessthatappliestobea
qualifiedMissouribusinessbutisturneddown.
TheMTCmustannuallyreviewtheactivitiesundertakenbythisbill
toensurecompliance. IftheMTCdeterminesthatabusinessisnot
insubstantialcompliance,itcaninformthebusinessthatthe
businesswillloseitsdesignationifitdoesnotcomeinto
compliancewithin120days.Ifthebusinessdoesnotcomeinto
compliance,theMTCcanrevokeitsdesignation. Ifabusiness
losesitsdesignationasaqualifiedMissouribusiness,itwillbe
precludedfrombeingallocatedanyadditionaltaxcredits.
However,investorsinsuchabusinesswillbeentitledtokeepall
ofthetaxcreditsproperlyissuedpriortothelossofdesignation
bythebusiness.
TheMTCmustreportcertaininformationannuallytotheDepartment
ofEconomicDevelopment,theGovernor,thePresidentProTemofthe
Senate,andtheSpeakeroftheHouseofRepresentatives.
ThisactsunsetsonDecember31,2032.
Currently,qualifiedtaxpayerscantakeataxcreditequalto50%
ofacontributionmadetowardsthephysicalrevitalization,
economicdevelopment,jobtraining,oreducationforindividuals,
communityservices,andcrimepreventionundertheNeighborhood
AssistanceAct.Thisbillincreasesthetaxcreditto70%ofsuch
contributions(Section32.115,RSMo).
Currently,qualifiedtaxpayerscantakeataxcreditequalto50%
ofcontributionsmadetocertainyouthprogramsundertheYouth
OpportunitiesandViolencePreventionTaxCreditAct.Thisbill
increasesthetaxcreditto70%ofsuchcontributions(Section
135.460).
ThebillamendsprovisionsoftheChampionforChildrenTaxCredit.
Thebillmodifiesthetime-framewithinwhichalltaxcredit
applicationstoclaimthechampionforchildrentaxcreditmustbe
filedbetweenJulyfirstandApril15thofeachfiscalyear,oras
directedbysection143.851,RSMo.
Currently,ifataxpayerisdeniedataxcreditbecauseofalack
ofavailablefunds,andthatdenialresultsinabalanceowedto
theState,thetaxpayerhas60daysfromthenoticeofdenialto makepaymentarrangements. Ifthebalanceisnotpaidwithin60
daysfromthenotice,theremainingbalancewillbedueandpayable
inthesamemanneraspersonalincometax.
Thisbillstatesthatintheeventofafullorpartialdenialofa
taxcreditbecausethecumulativemaximumamountofcreditshas
alreadybeenredeemed,andthatdenialresultsinanincometax
balanceowedtotheState,thetaxpayerwillnotbeheldliablefor
anyadditionaltax,penalty,orinterestonthatincometax
balance,providedthatpaymentarrangementsaremadewithin60days
fromtheissuanceofthenoticeofthecreditdenial.
Thebillrepealsthelanguagestatingthatifthebalanceisnot
paidwithin60daysfromthenotice,theremainingbalancewillbe
treatedaspersonalincometax.
ThisbillextendstheexpirationofthetaxcredittoDecember31,
2032(Section135.341).
Thisbillalsoamendsprovisionsofthe"DonatedFoodTaxCredit".
ThebillmodifiesthedaybywhichtheDepartmentofRevenue
Directormustestablishaproceduretoapportionthecumulative
amountoftaxcreditsamongalltaxpayersclaimingthecredittobe
April15thofthefiscalyear,orasdirectedbysection143.851.
Currently,theDepartmentofRevenueestablishesproceduresto
ensurethattaxpayerscanclaimallpossibleportionsofthetax
credituptothecumulativeamountavailableforthefiscalyear.
Thisbillstatesthatintheeventofafullorpartialdenialofa
taxcreditbecausethecumulativemaximumamountofcreditshas
alreadybeenredeemed,andthatdenialresultsinanincometax
balanceowedtotheState,thetaxpayerwillnotbeheldliablefor
anyadditionaltax,penalty,orinterestonthatincometax
balance,providedthatpaymentarrangementsaremadewithin60days
fromtheissuanceofthenoticeofthecreditdenial.
ThisbillextendstheexpirationofthetaxcredittoDecember31,
2032(Section135.647).
ThisbillissimilartoHB326(2025),HB682(2025)andSCSSB
1178(2024).
Thefollowingisasummaryofthepublictestimonyfromthe
committeehearing. Thetestimonywasbasedontheintroduced
versionofthebill. PROPONENTS: Supporterssaythatthislanguagewillincentive
investmentsinstart-upcompaniesthatoftenleadtoinnovation.
Surroundingstatesofferasimilarincentiveandtoooftenthese
businessesareleavingMissouribecauseangelinvestorsarebeing
offeredforthesetaxcreditincentives. Thereispotentialfor
growthintechnologyandhavingmorecapitalavailabletobusiness
inMissouriwouldbehelpful. Thisbillwouldbringpotential
investorsoffthesidelinesandhelpcreatejobsinbothurbanand
ruralcommunities
TestifyinginpersonforthebillwereRepresentative Gallick;
CodefiLLC;GreaterKansasCityChamberofCommerce,CityofKansas
CityandCivicCouncilofGreaterKansasCity;Biostl,GreaterSt.
Louis,Inc.;MissuriChamberofCommerceandIndustry;andJason
Wiens,NextMissouri.
OPPONENTS: Therewasnooppositionvoicedtothecommittee.
Writtentestimonyhasbeensubmittedforthisbill.Thefull
writtentestimonyandwitnessestestifyingonlinecanbefound
underTestimonyonthebillpageontheHousewebsite.