COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:0486S.01I Bill No.:SB 126 Subject:Tax Credits Type:Original Date:January 15, 2025Bill Summary:This proposal modifies provisions relating to benevolent tax credits.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2026FY 2027FY 2028General Revenue
Fund*
Could exceed
($6,280,831)
Could exceed
($6,280,831)
Could exceed
($6,280,831)
Total Estimated Net
Effect on General
Revenue
Could exceed
($6,280,831)
Could exceed
($6,280,831)
Could exceed
($6,280,831)
*Oversight reflects the reduction in GR due to changes in Section(s) 32.100-32.125 & 135.460,
increasing the redemption percentage from current percentages up to70%. Oversight notes the
overall changes will not have an effect beyond currently established maximum cap(s) for the
impacted tax credits.
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on Other State
Funds $0$0$0
Numbers within parentheses: () indicate costs or losses. L.R. No. 0486S.01I
Bill No. SB 126
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2026FY 2027FY 2028Total 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 2026FY 2027FY 2028Local Government$0$0$0 L.R. No. 0486S.01I
Bill No. SB 126
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FISCAL ANALYSIS
ASSUMPTION
Section 32.115 - Affordable Housing and Neighborhood Assistance Program
Officials from the Office of Administration – Budget & Planning (B&P) note:
This proposal would increase the value of the affordable housing and neighborhood assistance
tax credits to 70% of each contribution. B&P notes that the three-year average redemption
amount for affordable housing was $5,849,540 and the three-year average redemption amount
for neighborhood assistance was $8,786,859 from FY22 - FY24. B&P further notes that had the
tax credits been set at 70% of donations, redemptions would have been $7,444,870 for affordable
housing and $12,301,602 for neighborhood assistance. Therefore, this provision could reduce
GR by $5,110,073 annually beginning in FY26.
Officials from the Department of Revenue (DOR) note:
Neighborhood Assistance Tax Credit Program
This proposal also changes the Neighborhood Assistance Tax Credit program. The
Neighborhood Assistance Tax Credit program has a $16 million cap with the credit based on
50% of the contribution made. For informational purposes they are providing the amount
authorized, issued and redeemed for this credit.
YearAuthorizedIssued
Total
Redeemed
FY 2024$12,804,707.00$10,200,112.00$9,185,734.75FY 2023$15,028,834.00$12,330,085.00$9,107,306.80FY 2022$12,673,134.00$11,113,005.75$8,067,535.14FY 2021$11,924,548.00$9,048,913.00$8,623,742.15FY 2020$13,890,324.00$8,703,761.00$9,471,230.74FY 2019$15,035,823.00$10,377,614.00$8,947,215.78FY 2018$14,981,906.00$12,367,630.00$10,922,806.90FY 2017$14,041,962.00$14,490,650.00$14,831,654.17FY 2016$13,553,852.00$13,761,480.00$10,318,970.97 L.R. No. 0486S.01I
Bill No. SB 126
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FY 2015$15,974,536.00$11,435,785.00$8,230,285.75FY 2014$11,513,379.00$9,640,126.00$10,848,983.24FY 2013$14,996,900.00$10,144,225.00$7,392,112.96FY 2012$11,577,412.00$8,493,103.00$9,757,094.83
This proposal increases the percentage of the contribution from 50% to 70% for the amount of
the tax credit a person receives. An increase of $3,514,744. It is unclear if this would encourage
more taxpayers to contribute and claim the tax credit. The three-year average of the redemptions
of the program has been $8,786,859. However, since this program has an annual cap, it is not
expected to result in any additional impact to the state.
Affordable Housing Tax Credit
The Affordable Housing Tax Credit program currently provides a tax credit for 55% of a
contribution made. The credit currently has an $11 million cap. For informational purposes
DOR is providing the amount authorized, issued and redeemed for this credit.
YearAuthorizedIssued
Total
Redeemed
FY 2024$2,769,394.00$5,263,913.00$5,211,902.60FY 2023$8,932,400.00$4,174,401.00$8,716,793.01FY 2022$4,835,176.00$10,482,025.00$3,619,925.08FY 2021978,796.00$3,592,427.00$4,119,705.33FY 2020$10,971,408.00$4,510,701.00$4,025,790.93FY 2019$4,253,693.00$3,308,659.00$5,001,344.36FY 2018$4,676,726.00$6,145,103.00$4,752,091.91FY 2017$10,347,442.00$7,386,034.00$10,172,259.92FY 2016$10,988,370.00$13,171,092.00$8,484,672.81FY 2015$10,901,753.00$8,717,177.00$3,358,807.75FY 2014$8,197,923.00$4,844,279.00$5,620,749.73FY 2013$6,495,974.00$4,967,887.00$7,406,987.96FY 2012$4,871,580.00$5,990,591.00$5,629,465.92 L.R. No. 0486S.01I
Bill No. SB 126
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This proposal increases the percent of the contribution from 55% to 70% for the amount of the
tax credit a person receives. An increase of $1,595,329. It is unclear if this would encourage
more taxpayers to contribute and claim the tax credit. The three-year average of the redemptions
of the program has been $5,849,540. However, since this program has an annual cap, it is not
expected to result in any additional impact to the state.
Officials from the Department of Economic Development (DED) note:
This program currently provides a tax credit for 55% of a contribution made with a $11 million
cap. This proposal increases the percentage from 55% to 70% for amount of the tax credit. This
change could encourage more people to participate in this program. The three-year average of
the redemptions of the program has been $5,849,540. Increasing the percent to 70% would have
resulted in $7,444,870 in issued tax credits. Resulting in a total increase of $1,595,330. The
increased percent could result in more contributions, but MHDC does not have any information
as to how many more contributions would be made. Since the increased amount is lower than the
current cap of $11 million, this is not expected to have any additional impact to the state.
FY 2022
ACTUAL
FY 2023
ACTUAL
FY 2024
ACTUAL
3-Year
Average
Certificates Issued (#)298203173225Projects/Participants (#)48444546Amount Authorized $4,835,176$8,932,400 $2,769,394 $5,512,323 Amount Issued $10,482,025 $4,174,401 $5,263,913 $6,640,113 Amount Redeemed $3,619,925 $8,716,793 $5,211,903 $5,849,540
DED notes the actual figures produced from most recent AHAP Form 14 shows the 3 year
average redemption was $5,849,540.33. Therefore, 70% tax credit would have allowed for a total
of $7,444,869.52 in the same period.
Oversight notes Section 32.100 to 32.125 “Neighborhood Assistance Act” provides assistance to
community-based organizations that enable them to implement community or neighborhood
projects in the areas of community service, education, crime prevention, job training and
physical revitalization. There is a cumulative maximum cap of $32 million annually with
individual program caps as follows:
a) Section(s) 32.115 – Affordable Housing Assistance Program (AHAP) up to the same $10
million cap. (If other tax credits, within the section, are not fully utilized this section can
draw an additional $1 million allowing the cap to reach $11 million annually – as per
Section 32.115 4.).
b) Section 32.115 – Neighborhood Assistance Program (NAP with a maximum cap of $16
million.
L.R. No. 0486S.01I
Bill No. SB 126
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Oversight notes the AHAP program expenditures as follow:
FY 2022 ACTUALFY 2023 ACTUALFY 2024 ACTUALCertificates Issued (#)298 203 173 Projects/Participants (#)48 44 45 Amount Authorized$4,835,176 $8,932,400 $2,769,394 Amount Issued$10,482,025 $4,174,401 $5,263,913 Amount Redeemed$3,619,925 $8,716,793 $5,211,903
DED Form 14
Oversight notes the Affordable Housing Assistance Tax Credit Program (AHAP) is an incentive
for businesses and qualified individuals in Missouri to participate in the production of affordable
housing for low-income families. The credit can be used by a business or qualified individual as
a reduction in their state tax obligation. To receive the AHAP credit, a business or qualified
individual must donate cash, professional services, or real or personal property to a non-profit
organization whose primary purpose is to provide affordable housing for low-income families.
Oversight notes the 3-year average redemption was $5,849,540 at 55% contribution tax credit.
Oversight notes the 70% contribution tax credit would allow for a total of $7,444,870 in the
same period.
Oversight notes that the difference between 55% and 70% contribution redemption would total
to $1,595,329 ($7,444,870 - $5,849,540).
Oversight notes this proposal does not change the $11 million maximum cap for AHAP, instead
increases the percentage of the contribution from 55% to 70% for the amount of the tax credit.
This will allow for those who claim the tax credit receive greater amount of funds, but will not
affect the overall maximum cap available under the proposal.
Therefore, for the purpose of this fiscal note, Oversight will reflect only the credit difference of
$1,595,329 to the general revenue in the fiscal note.
Oversight notes the NAP program expenditures as follow:
FY 2022 ACTUALFY 2023 ACTUALFY 2024 ACTUALCertificates Issued (#)1,371 1,387 1,245 Projects/Participants (#)65 71 66 Amount Authorized$12,673,134 $15,028,834 $12,804,707 Amount Issued$11,113,006 $12,330,085 $10,200,112 Amount Redeemed$8,067,535 $9,107,307 $9,185,734
DED Form 14
Oversight notes the 3-year average redemption was $8,786,859 at 50% contribution tax credit. L.R. No. 0486S.01I
Bill No. SB 126
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Oversight notes the 70% contribution tax credit would have allowed for a total of $12,301,602
in the same period.
Oversight notes the difference between 50% and 70% contribution redemption would total to
$3,514,743 ($12,301,602 -$8,786,859).
Oversight notes this proposal does not change the $16 million maximum cap for NAP, instead
increases the percentage of the contribution from 50% to 70% for the tax credit. This will allow
for those who claim the tax credit to receive a greater amount of funds but will not affect the
overall maximum available cap, under the proposal.
Therefore, for the purpose of this fiscal note, Oversight will reflect only the credit difference of
$3,514,743 to the general revenue in the fiscal note.
Section 135.460 – Youth Opportunities Tax Credit
Officials from the Office of Administration – Budget & Planning (B&P) note:
This proposal would increase the value of the youth opportunities tax credit to 70% of each
contribution. B&P notes that the three-year average redemption amount was $2,926,896 from
FY22 – FY24. B&P further notes that had the tax credits been set at 70% of donations,
redemptions would have been $4,097,655. Therefore, B&P estimates that this provision could
reduce GR by $1,170,759 annually beginning in FY26.
Officials from the Department of Revenue (DOR) note:
This proposal also changes the Youth Opportunities Tax Credit program. The Youth
Opportunities tax credit program has a $6 million cap with the credit based on 50% of the
contribution made. For informational purposes DOR is providing the amount authorized, issued
and redeemed for this credit. L.R. No. 0486S.01I
Bill No. SB 126
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YearIssued
Total
Redeemed
FY 2024$9,756,101.00$4,706,331.00$3,468,054.65FY 2023$2,247,858.00$4,139,385.00$2,987,947.79FY 2022$5,706,067.00$3,039,904.00$2,324,687.48FY 2021$5,288,870.00$1,983,794.00$4,084,410.34FY 2020$1,212,623.00$4,086,770.50$5,217,305.77FY 2019$5,169,666.00$5,822,539.00$4,040,657.57FY 2018$6,826,426.00$5,726,775.00$4,818,711.26FY 2017$5,642,936.00$6,349,945.00$5,451,135.04FY 2016$6,375,728.00$5,411,972.00$4,706,636.11FY 2015$7,041,012.00$5,325,506.00$4,247,824.65FY 2014$5,941,601.50$5,080,128.00$5,239,666.42FY 2013$5,609,784.00$5,571,555.00$3,906,262.62FY 2012$5,843,692.62$4,152,310.83$4,979,894.20
This proposal increases the percent of the contribution from 50% to 70% for the amount of the
tax credit a person receives. An increase of $1,170,759. It is unclear if this would encourage
more taxpayers to contribute and claim the tax credit. The three-year average of the redemptions
of the program has been $2,926,897. However, since this program has an annual cap, it is not
expected to result in any additional impact to the state.
Oversight notes the YOP program expenditures as follow:
FY 2021 ACTUALFY 2022 ACTUALFY 2023 ACTUALCertificates Issued (#)974 1,504 1,559 Projects/Participants (#)36 13 57 Amount Authorized$5,706,067 $2,247,858 $9,756,101 Amount Issued$3,039,904 $4,139,385 $4,706,331 Amount Redeemed$2,324,687 $2,987,948 $3,468,054
DED Form 14 L.R. No. 0486S.01I
Bill No. SB 126
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Oversight notes the YOP is a contribution tax credit program, which broadens and strengthens
opportunities for positive development and participation in community life for youth and
discourages criminal and violent behavior. Individuals, businesses, and corporations having tax
liability in Missouri are eligible to receive tax credits for qualified donations to approved YOP
projects.
Oversight notes the 3-year average redemption was $2,926,896 at 50% contribution percentage
tax credit.
Oversight notes the 70% contribution tax credit would allow for a total of $4,097,655 in the
same period.
Oversight notes that the difference between 50% and 70% contribution redemption would total
to $1,170,759 ($4,097,655 -$2,926,896).
Oversight notes this proposal does not change the $6 million maximum YOP cap, instead it
increases the percentage of the contribution from 50% to 70% for the amount of the tax credit.
This will allow for those who claim the tax credit receive greater amount of funds, but will not
affect the overall maximum cap available under the proposal.
Therefore, for the purpose of this fiscal note, Oversight will reflect only the credit difference of
$1,170,759 to the general revenue in the fiscal note for the YOP tax credit.
Overall bill:
Officials from the DOR assume the Department will need to update their computer programs
(1,832) and forms ($2,200) for each credit. DOR estimates the total cost of the changes at
$12,096.
Oversight assumes the Department of Revenue (DOR) 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 fromthe Department of Commerce and Insurance (DCI) note a potential unknown
decrease of premium tax revenues (up to the tax credit limit established in the bill) in FY2026,
FY2027, and FY2028 as a result of the modification of provisions relating to benevolent tax
credits. Premium tax revenue is split 50/50 between General Revenue and County Foreign
Insurance Fund except for domestic Stock Property and Casualty Companies who pay premium
tax to the County Stock Fund. The County Foreign Insurance Fund is later distributed to school
districts throughout the state. County Stock Funds are later distributed to the school district and
county treasurer of the county in which the principal office of the insurer is located. It is
unknown how each of these funds may be impacted by tax credits each year and which insurers
will qualify for the modified tax credit. L.R. No. 0486S.01I
Bill No. SB 126
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Oversight notes, for purposes of this fiscal note, the fiscal note does not reflect the possibility
that some of the tax credits could be utilized against insurance premium taxes. If this occurs, the
loss in tax revenue would be split between the General Revenue Fund and the County Foreign
Insurance Fund, which ultimately goes to local school districts.
Rule Promulgation
Officials from the Joint Committee on Administrative Rules assume this proposal is not
anticipated to cause a fiscal impact beyond its current appropriation.
Officials from the Office of the Secretary of State (SOS) note many bills considered by the
General Assembly include provisions allowing or requiring agencies to submit rules and
regulations to implement the act. The SOS is provided with core funding to handle a certain
amount of normal activity resulting from each year's legislative session. The fiscal impact for
this fiscal note to the SOS for Administrative Rules is less than $5,000. The SOS recognizes that
this is a small amount and does not expect that additional funding would be required to meet
these costs. However, the SOS also recognizes that many such bills may be passed by the
General Assembly in a given year and that collectively the costs may be in excess of what the
office can sustain with its core budget. Therefore, the SOS reserves the right to request funding
for the cost of supporting administrative rules requirements should the need arise based on a
review of the finally approved bills signed by the governor.
FISCAL IMPACT – State GovernmentFY 2026
(10 Mo.)
FY 2027FY 2028GENERAL REVENUE FUND Revenue Reduction – Section 32.100 –
32.125 – Neighborhood Assistance
Program NPA (change in credit from
50% to 70%) p.7
Could exceed
($3,514,743)
Could exceed
($3,514,743)
Could exceed
($3,514,743)
Revenue Reduction – Section 32.115 –
Affordable Housing Assistance
Program AHAP (change in credit from
55% to 70%) p.6
Could exceed
($1,595,329)
Could exceed
($1,595,329)
Could exceed
($1,595,329)
Revenue Reduction – Section 135.460 –
Youth Opportunity Program YOP
(change in credit from 50% to 70%) p.9
Could exceed
($1,170,759)
Could exceed
($1,170,759)
Could exceed
($1,170,759)
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND
Could exceed
($6,280,831)
Could exceed
($6,280,831)
Could exceed
($6,280,831) L.R. No. 0486S.01I
Bill No. SB 126
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January 15, 2025
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FISCAL IMPACT – Local GovernmentFY 2026
(10 Mo.)
FY 2027FY 2028$0$0$0
FISCAL IMPACT – Small Business
Small businesses that qualify for the credit may be positively impacted as a result of this
proposal.
FISCAL DESCRIPTION
This act modifies provisions relating to benevolent tax credits.
NEIGHBORHOOD ASSISTANCE TAX CREDITS
Current law authorizes multiple tax credits for contributions made to and investments made for
the purposes of providing physical revitalization, economic development, job training or
education for individuals, community services, crime prevention, and affordable housing
assistance, with such tax credits being equal to varying percentages of the contributions or
investments made. This act sets each tax credit equal to 70% of the amount of such contributions
or investments. (Section 32.115)
YOUTH OPPORTUNITIES AND VIOLENCE PREVENTION TAX CREDIT
Current law authorizes a tax credit in the amount of 50% of contributions made to certain youth
programs. This act increases such tax credit to 70% of the amount of such contributions made.
(Section 135.460)
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space. L.R. No. 0486S.01I
Bill No. SB 126
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SOURCES OF INFORMATION
Department of Revenue
Office of Administration – Budget & Planning
Department of Economic Development
Department of Commerce and Insurance
Office of the Secretary of State
Joint Committee on Administrative Rules
Julie MorffJessica HarrisDirectorAssistant DirectorJanuary 15, 2025January 15, 2025