Section 620.6018

Title XL ADDITIONAL EXECUTIVE DEPARTMENTS

Chapter 620

Effective - 28 Aug 2026, see footnote   

  620.6018.  Retention and reinvestment incentive — definitions — withholding benefit, application, procedure — rules — sunset provision. — 1.  This section establishes an employer retention and reinvestment incentive within the Missouri works program under sections 620.2000 to 620.2020, providing withholding benefits to qualified companies that maintain a continued presence in a Missouri innovation zone and reinvest in their operations.

  2.  As used in this section, the following terms mean:

  (1)  "Baseline payroll", the annualized payroll for the project facility base employment or the total amount of taxable wages paid by the qualified company to full-time employees of the qualified company located at the project facility in the twelve months prior to the certification of a Missouri innovation zone.  For purposes of calculating the benefits under this program, the amount of base payroll shall increase each year based on an appropriate measure, as determined by the department;

  (2)  "Benefit agreement", an agreement entered into between a qualified company and the department under this section, consistent with the proposal and acceptance process under section 620.2010, that specifies:

  (a)  The amount and duration of the withholding benefit;

  (b)  The method by which the withholding benefit is delivered, whether as a credit or authorized retention of withholdings;

  (c)  The qualifying reinvestment expenditures to be undertaken by the qualified company, demonstrating that the qualifying reinvestment expenditures are new investments that supplement and do not supplant the qualified company's ordinary operating or capital expenditures within the certified Missouri innovation zone;

  (d)  Baseline payroll and maintenance requirements;

  (e)  Reporting, verification, audit, notice, and cure requirements; and

  (f)  Any other terms necessary to carry out the purposes of this section;

  (3)  "Covered employee", a full-time employee as defined in section 620.2005:

  (a)  Whose primary work location is physically located within a certified Missouri innovation zone; and

  (b)  Who performs services in person at such location for not less than thirty-five hours per week on average consistent with the full-time employee definition in section 620.2005, and for whom the qualified company offers health insurance and contributes at least fifty percent of the premium cost as required by section 620.2005;

  (4)  "Good standing", tax compliance and reporting in good standing consistent with section 620.2020, including that the qualified company:

  (a)  Is current in filing all required state tax returns;

  (b)  Has no delinquent tax liability, penalty, or interest outstanding unless such liability is subject to an approved payment agreement and the qualified company is in compliance with such agreement; and

  (c)  Is not subject to any final administrative or judicial order for tax delinquency that remains unsatisfied;

  (5)  "Material reduction of payroll", a reduction of more than five percent in the qualified company's aggregate gross payroll attributable to the originating Missouri location, measured against baseline payroll for such location;

  (6)  "Qualified company", a qualified company as defined in section 620.2005, including the health insurance coverage and tax compliance requirements thereof, and that:

  (a)  Operates or establishes a business location within a certified Missouri innovation zone; and

  (b)  Does not relocate, consolidate, or transfer business operations from another Missouri location into the certified Missouri innovation zone in a manner that results in a material reduction of payroll at the originating Missouri location.

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A qualified company shall not receive withholding benefits under this section for wages or payroll amounts used to calculate benefits under section 620.6021.  The department shall ensure that no payroll is used to generate benefits under both sections;

  (7)  "Qualifying reinvestment expenditures", documented expenditures incurred by a qualified company for capital improvements or other investments at or for the benefit of the certified Missouri innovation zone location including, but not limited to, security and safety improvements such as law enforcement, as defined in section 620.6012; lighting, cameras, and access control; building systems improvements; tenant improvements; public infrastructure improvements; life-safety systems; code compliance; accessibility improvements; or other expenditures approved by the department that are consistent with the purposes of this section, provided that such expenditures supplement and do not supplant ordinary operating expenses, as defined by the previous twelve months of operating expenses;

  (8)  "Retained job", an existing job in the state if the department determines that the existing job could be relocated to another state in the absence of a certified Missouri innovation zone;

  (9)  "Withholding benefit", the state income tax withholdings attributable to covered employees that a qualified company is authorized to retain or receive as a tax credit under a benefit agreement under this section, consistent with the withholding tax retention mechanism under the Missouri works program in section 620.2010.

  3.  A qualified company may, but shall not be required to, apply to enter into a benefit agreement with the department under this section.  For all tax years beginning on or after January 1, 2027, a qualified company that enters into a benefit agreement shall receive a withholding benefit attributable to covered employees.  The withholding benefit may be delivered either as a withholding tax credit or as authorized retention of state income tax withholdings, as specified in the benefit agreement.  The method of delivery shall not affect the amount of the withholding benefit authorized under this section.

  4.  (1)  Applications for a benefit agreement may be submitted at any time.  The department shall approve or deny any application for a withholding agreement within forty-five calendar days of receipt of a complete application.  The department may approve a withholding agreement unless it determines that:

  (a)  The applicant does not meet the eligibility requirements of this section; or

  (b)  The applicant is not in good standing with the department or the department of revenue with respect to tax compliance or reporting obligations.

  (2)  Any denial shall be issued in writing and shall state the specific grounds for denial.  Failure of the department to approve or deny an application within forty-five calendar days shall result in deemed approval of the application as submitted.

  (3)  Notwithstanding the provisions of section 32.057 to the contrary, the department of revenue shall disclose to the department such information as is necessary to verify whether an applicant is in good standing with respect to tax compliance and reporting obligations under this section.  Any information disclosed pursuant to this subdivision shall remain confidential and shall not be subject to disclosure under chapter 610 and shall not be disclosed in a manner that identifies confidential taxpayer information beyond what is necessary to administer this section.

  (4)  In determining the amount of benefit to a qualified company under this subsection, the department may consider the following factors:

  (a)  The amount of projected net fiscal benefit to the state of the project and the period in which the state would realize such net fiscal benefit;

  (b)  The financial stability and creditworthiness of the qualified company; and

  (c)  The level of economic distress in the area.

  5.  The withholding benefit authorized under this section shall be determined based on the amount of state income tax withholdings attributable to covered employees in new jobs and retained jobs at the certified Missouri innovation zone location, consistent with the withholding tax retention mechanism under section 620.2010; provided, however, that in no event shall the withholding benefit exceed three percent of the aggregate gross wages paid to new and retained jobs at the certified Missouri innovation zone location during a tax year.  The withholding benefit may be authorized for a period of not fewer than three years and not to exceed ten years for a qualified company as specified in the benefit agreement.  A withholding benefit issued under this section shall be nonrefundable and may be carried forward in accordance with the terms of the benefit agreement.

  6.  A benefit agreement shall provide that the withholding benefit is requested and authorized on a quarterly basis, based on state income tax withholdings attributable to covered employees during the applicable calendar quarter.  The department may authorize a benefit agreement to permit requests on a semi-annual basis if determined appropriate based on the size or nature of the qualified company and provided that such authorization does not impact verification or compliance.  For purposes of this subsection, the "applicable request period" means the calendar quarter or, if authorized by the department, the semi-annual period specified in the benefit agreement.  In no event shall a benefit agreement authorize automatic retention or crediting of withholdings beyond the applicable request period without review and verification as required by this section.

  7.  Any withholding benefit received under this section shall be used solely for qualifying reinvestment expenditures.  In no event shall the total amount of withholding benefit received by a qualified company exceed the total amount of qualifying reinvestment expenditures actually incurred and paid under the benefit agreement.

  8.  To receive and retain a withholding benefit under this section, a qualified company shall:

  (1)  Operate within a certified Missouri innovation zone;

  (2)  Demonstrate a commitment to remain at the certified Missouri innovation zone location for not less than five years;

  (3)  Complete qualifying reinvestment expenditures under the benefit agreement;

  (4)  Maintain not less than ninety-five percent of baseline payroll, subject to notice and cure; and

  (5)  Submit any other information reasonably requested by the department.

  9.  (1)  A qualified company receiving a withholding benefit shall submit to the department, on a quarterly basis, a certification of:

  (a)  State income tax withholdings attributable to covered employees;

  (b)  Compliance with payroll maintenance requirements; and

  (c)  Qualifying reinvestment expenditures incurred to date.

  (2)  If the department determines that a qualified company is not in compliance, the department shall provide written notice of noncompliance.  The qualified company shall have thirty calendar days from receipt of such notice to cure the noncompliance or submit a cure plan acceptable to the department.  If the qualified company fails to cure within the applicable period, the benefit agreement shall be suspended or terminated, and any excess withholding benefit shall be subject to recapture as provided in the agreement.

  10.  The department may authorize a benefit agreement for an employer that is newly locating or expanding within a certified Missouri innovation zone, provided that baseline payroll is established under the benefit agreement following a reasonable ramp-up period, not to exceed four consecutive calendar quarters from the commencement of operations or expansion.

  11.  The department may audit qualifying reinvestment expenditures and withholding benefit usage.  Any amount determined to have been improperly claimed or retained shall be repaid to the state or offset against future withholding benefits, as provided in the benefit agreement.

  12.  A qualified company may participate in the incentive authorized under this section concurrently with participation in the Missouri one-start program under sections 620.800 to 620.809, or the state economic development programs, provided that each program's statutory requirements are independently satisfied.  Participation under this subsection shall not disqualify a qualified company from other incentives, nor shall benefits under this section be aggregated for purposes of determining eligibility or leverage under other programs expressly required by law.  The withholding tax credit under the Missouri one start program under sections 620.800 to 620.809 shall be collected and disbursed prior to the collection and disbursement of the withholding benefits under the provisions of this section.  In no event shall the same state income tax withholdings, or projected withholdings, be used to calculate, authorize, or support benefits under more than one program referenced in this subsection.

  13.  Tax credits issued under the provisions of this section shall be nonrefundable but may be carried forward for up to five subsequent tax years.  No tax credit claimed under this section shall be assigned, transferred, sold, or otherwise conveyed.

  14.  The department, in coordination with the department of revenue, shall promulgate all necessary rules and regulations to administer this section.  Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028.  This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2026, shall be invalid and void.

  15.  Notwithstanding the sunset and termination provisions under sections 620.2000 to 620.2020, this section shall sunset ten years after August 28, 2026, unless reauthorized by an act of the general assembly.  Any benefit agreement entered into under this section prior to the sunset shall continue in full force and effect in accordance with its terms, and the department shall retain authority to administer, enforce, audit, and take action under any such agreement after the expiration of sections 620.6000 to 620.6033.

  16.  Notwithstanding subsections 7 and 8 of section 620.2020 to the contrary, incentives authorized under this section shall be administered and accounted for separately from the annual limitations established under subsections 7 and 8 of section 620.2020, and amounts authorized under this section shall not reduce the availability of amounts otherwise allocable under such subsections.

  17.  Notwithstanding the minimum new job creation requirements otherwise applicable under section 620.2020, a qualified company located within a certified Missouri innovation zone shall be eligible to apply for a benefit agreement under this section if such company employs not fewer than three covered employees at its certified Missouri innovation zone location.  The minimum job creation thresholds set forth in section 620.2010 shall not be construed to impose a withholding benefit authorized under this section with respect to retained employees at a certified Missouri innovation zone location.

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(L. 2026 H.B. 3231 & 2531)

Sunset date 8-28-36