Missouri 2025 Regular Session

Missouri Senate Bill SB349 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2	EXPLANATION-Matter enclosed in bold-faced brackets [thus] in this bill is not enacted
3	3	and is intended to be omitted in the law.
4	4	FIRST REGULAR SESSION
5	5	SENATE BILL NO. 349
6	6	103RD GENERAL ASSEMBLY
7	7	INTRODUCED BY SENATOR FITZWATER.
8	8	0641S.01I KRISTINA MARTIN, Secretary
9	9	AN ACT
10	10	To repeal section 143.121, RSMo, and to enact in lieu thereof one new section relating to an
11	11	income tax deduction for certain research expenses.
12	12
13	13	Be it enacted by the General Assembly of the State of Missouri, as follows:
14	14	Section A. Section 143.121, RSMo, is repealed and one new 1
15	15	section enacted in lieu thereof, to be known as section 143.121, 2
16	16	to read as follows:3
17	17	143.121. 1. The Missouri adjusted gross income of a 1
18	18	resident individual shall be the taxpayer's federal adjusted 2
19	19	gross income subject to the modifications in this section. 3
20	20	2. There shall be added to the taxpayer's federal 4
21	21	adjusted gross income : 5
22	22	(1) The amount of any federal income tax refund 6
23	23	received for a prior year which resulted in a Missouri 7
24	24	income tax benefit. The amount added pursuant to this 8
25	25	subdivision shall not include any amount of a federal income 9
26	26	tax refund attributable t o a tax credit reducing a 10
27	27	taxpayer's federal tax liability pursuant to Public Law 116 - 11
28	28	136 or 116-260, enacted by the 116th United States Congress, 12
29	29	for the tax year beginning on or after January 1, 2020, and 13
30	30	ending on or before December 31, 2020, and de ducted from 14
31	31	Missouri adjusted gross income pursuant to section 143.171. 15
32	32	The amount added under this subdivision shall also not 16
33	33	include any amount of a federal income tax refund 17
34	34	attributable to a tax credit reducing a taxpayer's federal 18 SB 349 2
35	35	tax liability under any other federal law that provides 19
36	36	direct economic impact payments to taxpayers to mitigate 20
37	37	financial challenges related to the COVID -19 pandemic, and 21
38	38	deducted from Missouri adjusted gross income under section 22
39	39	143.171; 23
40	40	(2) Interest on certain governmental obligations 24
41	41	excluded from federal gross income by 26 U.S.C. Section 103 25
42	42	of the Internal Revenue Code, as amended. The previous 26
43	43	sentence shall not apply to interest on obligations of the 27
44	44	state of Missouri or any of its political subdiv isions or 28
45	45	authorities and shall not apply to the interest described in 29
46	46	subdivision (1) of subsection 3 of this section. The amount 30
47	47	added pursuant to this subdivision shall be reduced by the 31
48	48	amounts applicable to such interest that would have been 32
49	49	deductible in computing the taxable income of the taxpayer 33
50	50	except only for the application of 26 U.S.C. Section 265 of 34
51	51	the Internal Revenue Code, as amended. The reduction shall 35
52	52	only be made if it is at least five hundred dollars; 36
53	53	(3) The amount of any deduction that is included in 37
54	54	the computation of federal taxable income pursuant to 26 38
55	55	U.S.C. Section 168 of the Internal Revenue Code as amended 39
56	56	by the Job Creation and Worker Assistance Act of 2002 to the 40
57	57	extent the amount deducted relates to pro perty purchased on 41
58	58	or after July 1, 2002, but before July 1, 2003, and to the 42
59	59	extent the amount deducted exceeds the amount that would 43
60	60	have been deductible pursuant to 26 U.S.C. Section 168 of 44
61	61	the Internal Revenue Code of 1986 as in effect on January 1 , 45
62	62	2002; 46
63	63	(4) The amount of any deduction that is included in 47
64	64	the computation of federal taxable income for net operating 48
65	65	loss allowed by 26 U.S.C. Section 172 of the Internal 49
66	66	Revenue Code of 1986, as amended, other than the deduction 50 SB 349 3
67	67	allowed by 26 U.S.C. Section 172(b)(1)(G) and 26 U.S.C. 51
68	68	Section 172(i) of the Internal Revenue Code of 1986, as 52
69	69	amended, for a net operating loss the taxpayer claims in the 53
70	70	tax year in which the net operating loss occurred or carries 54
71	71	forward for a period of more t han twenty years and carries 55
72	72	backward for more than two years. Any amount of net 56
73	73	operating loss taken against federal taxable income but 57
74	74	disallowed for Missouri income tax purposes pursuant to this 58
75	75	subdivision after June 18, 2002, may be carried forwa rd and 59
76	76	taken against any income on the Missouri income tax return 60
77	77	for a period of not more than twenty years from the year of 61
78	78	the initial loss; and 62
79	79	(5) For nonresident individuals in all taxable years 63
80	80	ending on or after December 31, 2006, the amo unt of any 64
81	81	property taxes paid to another state or a political 65
82	82	subdivision of another state for which a deduction was 66
83	83	allowed on such nonresident's federal return in the taxable 67
84	84	year unless such state, political subdivision of a state, or 68
85	85	the District of Columbia allows a subtraction from income 69
86	86	for property taxes paid to this state for purposes of 70
87	87	calculating income for the income tax for such state, 71
88	88	political subdivision of a state, or the District of 72
89	89	Columbia; 73
90	90	(6) For all tax years beginni ng on or after January 1, 74
91	91	2018, any interest expense paid or accrued in a previous 75
92	92	taxable year, but allowed as a deduction under 26 U.S.C. 76
93	93	Section 163, as amended, in the current taxable year by 77
94	94	reason of the carryforward of disallowed business intere st 78
95	95	provisions of 26 U.S.C. Section 163(j), as amended. For the 79
96	96	purposes of this subdivision, an interest expense is 80
97	97	considered paid or accrued only in the first taxable year 81
98	98	the deduction would have been allowable under 26 U.S.C. 82 SB 349 4
99	99	Section 163, as amen ded, if the limitation under 26 U.S.C. 83
100	100	Section 163(j), as amended, did not exist ; 84
101	101	(7) For all tax years beginning on or after January 1, 85
102	102	2022, the amount deducted by the taxpayer under 26 U.S.C. 86
103	103	Section 174(a)(2)(B), as amended, for the tax year . 87
104	104	3. There shall be subtracted from the taxpayer's 88
105	105	federal adjusted gross income the following amounts to the 89
106	106	extent included in federal adjusted gross income: 90
107	107	(1) Interest received on deposits held at a federal 91
108	108	reserve bank or interest or div idends on obligations of the 92
109	109	United States and its territories and possessions or of any 93
110	110	authority, commission or instrumentality of the United 94
111	111	States to the extent exempt from Missouri income taxes 95
112	112	pursuant to the laws of the United States. The amount 96
113	113	subtracted pursuant to this subdivision shall be reduced by 97
114	114	any interest on indebtedness incurred to carry the described 98
115	115	obligations or securities and by any expenses incurred in 99
116	116	the production of interest or dividend income described in 100
117	117	this subdivision. The reduction in the previous sentence 101
118	118	shall only apply to the extent that such expenses including 102
119	119	amortizable bond premiums are deducted in determining the 103
120	120	taxpayer's federal adjusted gross income or included in the 104
121	121	taxpayer's Missouri itemize d deduction. The reduction shall 105
122	122	only be made if the expenses total at least five hundred 106
123	123	dollars; 107
124	124	(2) The portion of any gain, from the sale or other 108
125	125	disposition of property having a higher adjusted basis to 109
126	126	the taxpayer for Missouri income tax purposes than for 110
127	127	federal income tax purposes on December 31, 1972, that does 111
128	128	not exceed such difference in basis. If a gain is 112
129	129	considered a long-term capital gain for federal income tax 113 SB 349 5
130	130	purposes, the modification shall be limited to one -half of 114
131	131	such portion of the gain; 115
132	132	(3) The amount necessary to prevent the taxation 116
133	133	pursuant to this chapter of any annuity or other amount of 117
134	134	income or gain which was properly included in income or gain 118
135	135	and was taxed pursuant to the laws of Missouri for a ta xable 119
136	136	year prior to January 1, 1973, to the taxpayer, or to a 120
137	137	decedent by reason of whose death the taxpayer acquired the 121
138	138	right to receive the income or gain, or to a trust or estate 122
139	139	from which the taxpayer received the income or gain; 123
140	140	(4) Accumulation distributions received by a taxpayer 124
141	141	as a beneficiary of a trust to the extent that the same are 125
142	142	included in federal adjusted gross income; 126
143	143	(5) The amount of any state income tax refund for a 127
144	144	prior year which was included in the federal adj usted gross 128
145	145	income; 129
146	146	(6) The portion of capital gain specified in section 130
147	147	135.357 that would otherwise be included in federal adjusted 131
148	148	gross income; 132
149	149	(7) The amount that would have been deducted in the 133
150	150	computation of federal taxable income pu rsuant to 26 U.S.C. 134
151	151	Section 168 of the Internal Revenue Code as in effect on 135
152	152	January 1, 2002, to the extent that amount relates to 136
153	153	property purchased on or after July 1, 2002, but before July 137
154	154	1, 2003, and to the extent that amount exceeds the amount 138
155	155	actually deducted pursuant to 26 U.S.C. Section 168 of the 139
156	156	Internal Revenue Code as amended by the Job Creation and 140
157	157	Worker Assistance Act of 2002; 141
158	158	(8) For all tax years beginning on or after January 1, 142
159	159	2005, the amount of any income received for mi litary service 143
160	160	while the taxpayer serves in a combat zone which is included 144
161	161	in federal adjusted gross income and not otherwise excluded 145 SB 349 6
162	162	therefrom. As used in this section, "combat zone" means any 146
163	163	area which the President of the United States by Execut ive 147
164	164	Order designates as an area in which Armed Forces of the 148
165	165	United States are or have engaged in combat. Service is 149
166	166	performed in a combat zone only if performed on or after the 150
167	167	date designated by the President by Executive Order as the 151
168	168	date of the commencing of combat activities in such zone, 152
169	169	and on or before the date designated by the President by 153
170	170	Executive Order as the date of the termination of combatant 154
171	171	activities in such zone; 155
172	172	(9) For all tax years ending on or after July 1, 2002, 156
173	173	with respect to qualified property that is sold or otherwise 157
174	174	disposed of during a taxable year by a taxpayer and for 158
175	175	which an additional modification was made under subdivision 159
176	176	(3) of subsection 2 of this section, the amount by which 160
177	177	additional modificatio n made under subdivision (3) of 161
178	178	subsection 2 of this section on qualified property has not 162
179	179	been recovered through the additional subtractions provided 163
180	180	in subdivision (7) of this subsection; 164
181	181	(10) For all tax years beginning on or after January 165
182	182	1, 2014, the amount of any income received as payment from 166
183	183	any program which provides compensation to agricultural 167
184	184	producers who have suffered a loss as the result of a 168
185	185	disaster or emergency, including the: 169
186	186	(a) Livestock Forage Disaster Program; 170
187	187	(b) Livestock Indemnity Program; 171
188	188	(c) Emergency Assistance for Livestock, Honeybees, and 172
189	189	Farm-Raised Fish; 173
190	190	(d) Emergency Conservation Program; 174
191	191	(e) Noninsured Crop Disaster Assistance Program; 175
192	192	(f) Pasture, Rangeland, Forage Pilot I nsurance Program; 176
193	193	(g) Annual Forage Pilot Program; 177 SB 349 7
194	194	(h) Livestock Risk Protection Insurance Plan; 178
195	195	(i) Livestock Gross Margin Insurance Plan; 179
196	196	(11) For all tax years beginning on or after January 180
197	197	1, 2018, any interest expense paid or accrued in the current 181
198	198	taxable year, but not deducted as a result of the limitation 182
199	199	imposed under 26 U.S.C. Section 163(j), as amended. For the 183
200	200	purposes of this subdivision, an interest expense is 184
201	201	considered paid or accrued only in the first taxable y ear 185
202	202	the deduction would have been allowable under 26 U.S.C. 186
203	203	Section 163, as amended, if the limitation under 26 U.S.C. 187
204	204	Section 163(j), as amended, did not exist; 188
205	205	(12) One hundred percent of any retirement benefits 189
206	206	received by any taxpayer as a re sult of the taxpayer's 190
207	207	service in the Armed Forces of the United States, including 191
208	208	reserve components and the National Guard of this state, as 192
209	209	defined in 32 U.S.C. Sections 101(3) and 109, and any other 193
210	210	military force organized under the laws of this s tate; [and] 194
211	211	(13) For all tax years beginning on or after January 195
212	212	1, 2022, one hundred percent of any federal, state, or local 196
213	213	grant moneys received by the taxpayer if the grant money was 197
214	214	disbursed for the express purpose of providing or expanding 198
215	215	access to broadband internet to areas of the state deemed to 199
216	216	be lacking such access ; and 200
217	217	(14) For all tax years beginning on or after January 201
218	218	1, 2022, the amount of specified research or experimental 202
219	219	expenditures that are both required to be char ged to capital 203
220	220	account and actually are charged to capital account as 204
221	221	required by 26 U.S.C. Section 174(a)(2)(A), as amended, for 205
222	222	the tax year, after any reduction to that amount under 26 206
223	223	U.S.C. Section 280C(c), as amended . 207
224	224	4. There shall be added to or subtracted from the 208
225	225	taxpayer's federal adjusted gross income the taxpayer's 209 SB 349 8
226	226	share of the Missouri fiduciary adjustment provided in 210
227	227	section 143.351. 211
228	228	5. There shall be added to or subtracted from the 212
229	229	taxpayer's federal adjusted gross income the modifications 213
230	230	provided in section 143.411. 214
231	231	6. In addition to the modifications to a taxpayer's 215
232	232	federal adjusted gross income in this section, to calculate 216
233	233	Missouri adjusted gross income there shall be subtracted 217
234	234	from the taxpayer's federal a djusted gross income any gain 218
235	235	recognized pursuant to 26 U.S.C. Section 1033 of the 219
236	236	Internal Revenue Code of 1986, as amended, arising from 220
237	237	compulsory or involuntary conversion of property as a result 221
238	238	of condemnation or the imminence thereof. 222
239	239	7. (1) As used in this subsection, "qualified health 223
240	240	insurance premium" means the amount paid during the tax year 224
241	241	by such taxpayer for any insurance policy primarily 225
242	242	providing health care coverage for the taxpayer, the 226
243	243	taxpayer's spouse, or the taxpayer's dependents. 227
244	244	(2) In addition to the subtractions in subsection 3 of 228
245	245	this section, one hundred percent of the amount of qualified 229
246	246	health insurance premiums shall be subtracted from the 230
247	247	taxpayer's federal adjusted gross income to the extent the 231
248	248	amount paid for such premiums is included in federal taxable 232
249	249	income. The taxpayer shall provide the department of 233
250	250	revenue with proof of the amount of qualified health 234
251	251	insurance premiums paid. 235
252	252	8. (1) Beginning January 1, 2014, in addition to the 236
253	253	subtractions provided in this section, one hundred percent 237
254	254	of the cost incurred by a taxpayer for a home energy audit 238
255	255	conducted by an entity certified by the department of 239
256	256	natural resources under section 640.153 or the 240
257	257	implementation of any energy effici ency recommendations made 241 SB 349 9
258	258	in such an audit shall be subtracted from the taxpayer's 242
259	259	federal adjusted gross income to the extent the amount paid 243
260	260	for any such activity is included in federal taxable 244
261	261	income. The taxpayer shall provide the department of 245
262	262	revenue with a summary of any recommendations made in a 246
263	263	qualified home energy audit, the name and certification 247
264	264	number of the qualified home energy auditor who conducted 248
265	265	the audit, and proof of the amount paid for any activities 249
266	266	under this subsection fo r which a deduction is claimed. The 250
267	267	taxpayer shall also provide a copy of the summary of any 251
268	268	recommendations made in a qualified home energy audit to the 252
269	269	department of natural resources. 253
270	270	(2) At no time shall a deduction claimed under this 254
271	271	subsection by an individual taxpayer or taxpayers filing 255
272	272	combined returns exceed one thousand dollars per year for 256
273	273	individual taxpayers or cumulatively exceed two thousand 257
274	274	dollars per year for taxpayers filing combined returns. 258
275	275	(3) Any deduction claimed under this subsection shall 259
276	276	be claimed for the tax year in which the qualified home 260
277	277	energy audit was conducted or in which the implementation of 261
278	278	the energy efficiency recommendations occurred. If 262
279	279	implementation of the energy efficiency recommendation s 263
280	280	occurred during more than one year, the deduction may be 264
281	281	claimed in more than one year, subject to the limitations 265
282	282	provided under subdivision (2) of this subsection. 266
283	283	(4) A deduction shall not be claimed for any otherwise 267
284	284	eligible activity under this subsection if such activity 268
285	285	qualified for and received any rebate or other incentive 269
286	286	through a state-sponsored energy program or through an 270
287	287	electric corporation, gas corporation, electric cooperative, 271
288	288	or municipally owned utility. 272 SB 349 10
289	289	9. The provisions of subsection 8 of this section 273
290	290	shall expire on December 31, 2020. 274
291	291	10. (1) As used in this subsection, the following 275
292	292	terms mean: 276
293	293	(a) "Beginning farmer", a taxpayer who: 277
294	294	a. Has filed at least one but not more than ten 278
295	295	Internal Revenue Service Schedule F (Form 1040) Profit or 279
296	296	Loss From Farming forms since turning eighteen years of age; 280
297	297	b. Is approved for a beginning farmer loan through the 281
298	298	USDA Farm Service Agency Beginning Farmer direct or 282
299	299	guaranteed loan program; 283
300	300	c. Has a farming operation that is determined by the 284
301	301	department of agriculture to be new production agriculture 285
302	302	but is the principal operator of a farm and has substantial 286
303	303	farming knowledge; or 287
304	304	d. Has been determined by the department of 288
305	305	agriculture to be a qualified family member; 289
306	306	(b) "Farm owner", an individual who owns farmland and 290
307	307	disposes of or relinquishes use of all or some portion of 291
308	308	such farmland as follows: 292
309	309	a. A sale to a beginning farmer; 293
310	310	b. A lease or rental agree ment not exceeding ten years 294
311	311	with a beginning farmer; or 295
312	312	c. A crop-share arrangement not exceeding ten years 296
313	313	with a beginning farmer; 297
314	314	(c) "Qualified family member", an individual who is 298
315	315	related to a farm owner within the fourth degree by blo od, 299
316	316	marriage, or adoption and who is purchasing or leasing or is 300
317	317	in a crop-share arrangement for land from all or a portion 301
318	318	of such farm owner's farming operation. 302
319	319	(2) (a) In addition to all other subtractions 303
320	320	authorized in this section, a taxpa yer who is a farm owner 304 SB 349 11
321	321	who sells all or a portion of such farmland to a beginning 305
322	322	farmer may subtract from such taxpayer's Missouri adjusted 306
323	323	gross income an amount to the extent included in federal 307
324	324	adjusted gross income as provided in this subdivision . 308
325	325	(b) Subject to the limitations in paragraph (c) of 309
326	326	this subdivision, the amount that may be subtracted shall be 310
327	327	equal to the portion of capital gains received from the sale 311
328	328	of such farmland that such taxpayer receives in the tax year 312
329	329	for which such taxpayer subtracts such capital gain. 313
330	330	(c) A taxpayer may subtract the following amounts and 314
331	331	percentages per tax year in total capital gains received 315
332	332	from the sale of such farmland under this subdivision: 316
333	333	a. For the first two million doll ars received, one 317
334	334	hundred percent; 318
335	335	b. For the next one million dollars received, eighty 319
336	336	percent; 320
337	337	c. For the next one million dollars received, sixty 321
338	338	percent; 322
339	339	d. For the next one million dollars received, forty 323
340	340	percent; and 324
341	341	e. For the next one million dollars received, twenty 325
342	342	percent. 326
343	343	(d) The department of revenue shall prepare an annual 327
344	344	report reviewing the costs and benefits and containing 328
345	345	statistical information regarding the subtraction of capital 329
346	346	gains authorized under this subdivision for the previous tax 330
347	347	year including, but not limited to, the total amount of all 331
348	348	capital gains subtracted and the number of taxpayers 332
349	349	subtracting such capital gains. Such report shall be 333
350	350	submitted before February first of each yea r to the 334
351	351	committee on agriculture policy of the Missouri house of 335
352	352	representatives and the committee on agriculture, food 336 SB 349 12
353	353	production and outdoor resources of the Missouri senate, or 337
354	354	the successor committees. 338
355	355	(3) (a) In addition to all other subtr actions 339
356	356	authorized in this section, a taxpayer who is a farm owner 340
357	357	who enters a lease or rental agreement for all or a portion 341
358	358	of such farmland with a beginning farmer may subtract from 342
359	359	such taxpayer's Missouri adjusted gross income an amount to 343
360	360	the extent included in federal adjusted gross income as 344
361	361	provided in this subdivision. 345
362	362	(b) Subject to the limitation in paragraph (c) of this 346
363	363	subdivision, the amount that may be subtracted shall be 347
364	364	equal to the portion of cash rent income received from the 348
365	365	lease or rental of such farmland that such taxpayer receives 349
366	366	in the tax year for which such taxpayer subtracts such 350
367	367	income. 351
368	368	(c) No taxpayer shall subtract more than twenty -five 352
369	369	thousand dollars per tax year in total cash rent income 353
370	370	received from the lease or rental of such farmland under 354
371	371	this subdivision. 355
372	372	(4) (a) In addition to all other subtractions 356
373	373	authorized in this section, a taxpayer who is a farm owner 357
374	374	who enters a crop-share arrangement on all or a portion of 358
375	375	such farmland with a beginning farmer may subtract from such 359
376	376	taxpayer's Missouri adjusted gross income an amount to the 360
377	377	extent included in federal adjusted gross income as provided 361
378	378	in this subdivision. 362
379	379	(b) Subject to the limitation in paragraph (c) of this 363
380	380	subdivision, the amount that may be subtracted shall be 364
381	381	equal to the portion of income received from the crop -share 365
382	382	arrangement on such farmland that such taxpayer receives in 366
383	383	the tax year for which such taxpayer subtracts such income. 367 SB 349 13
384	384	(c) No taxpayer shall subtract more than twenty -five 368
385	385	thousand dollars per tax year in total income received from 369
386	386	the lease or rental of such farmland under this subdivision. 370
387	387	(5) The department of agriculture shall, by rule, 371
388	388	establish a process to verify that a taxpayer is a beginning 372
389	389	farmer for purposes of this section and shall provide 373
390	390	verification to the beginning farmer and farm seller of such 374
391	391	farmer's and seller's certification and qualification for 375
392	392	the exemption provided in this subsection. 376
393	393	