Section 620.6027

Title XL ADDITIONAL EXECUTIVE DEPARTMENTS

Chapter 620

Effective - 28 Aug 2026, see footnote   

  620.6027.  Missouri opportunity zone program — definitions — election to defer tax liability, when, requirements — verification documentation — income tax return requirements — rules. — 1.  This section establishes the "Missouri Opportunity Zone" program as an overlay within the certified Missouri innovation zone, designed to encourage long-term private investment by allowing the payment deferral of Missouri income tax liabilities when such amounts are reinvested in qualifying property or businesses located within such zones.

  2.  For purposes of this section, the following terms mean:

  (1)  "Equity investment", an ownership interest in an operating business or investment property, whether held directly or indirectly, including as a general partner, limited partner, member, or shareholder, that is subject to the risks of the enterprise and does not constitute indebtedness;

  (2)  "Inclusion event", any event that terminates or partially terminates deferral under this section, as set forth in subsection 5 of this section;

  (3)  "Investment property", real property located within a Missouri opportunity zone that is acquired, held, or improved for purposes of commercial, residential, or mixed-use investment, whether or not such property is income-producing or cash-flowing at the time of acquisition, and that is not treated as an operating business for purposes of this section.  Investment property shall qualify only if such property is placed into active commercial, residential, or mixed-use operation within thirty months of acquisition or the initial qualified Missouri opportunity zone investment, whichever is later, and is not held through a shell entity or other arrangement lacking bona fide active operation, redevelopment, or productive use;

  (4)  "Missouri income tax liability", the taxpayer's net Missouri individual income tax liability for the taxable year imposed directly by section 143.011 or 143.041 after application of all credits except for reduction by withholding, estimated payments, or other remittances;

  (5)  "Missouri opportunity zone", any certified Missouri innovation zone under sections 620.6000 to 620.6033;

  (6)  "Operating business", a trade or business that:

  (a)  Is located within a Missouri opportunity zone; and

  (b)  Either:

  a.  Conducts active trade or business operations within such Missouri opportunity zone and derives not less than fifty percent of its gross revenue from activities conducted within such zone; or

  b.  Has adopted a written business plan to commence such active trade or business operations within twenty-four months of receiving a qualified Missouri opportunity zone investment and is actively deploying capital toward that purpose in a manner consistent with such plan.

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For purposes of this section an operating business includes the production of income through the provision of goods or services, employment or personnel, or leasing of space as part of an active commercial enterprise, but shall not include a passive investment vehicle, holding company, or shell entity formed for the purpose of tax deferral without meaningful economic activity;

  (7)  "Qualified Missouri opportunity zone fund", an entity organized for the purpose of investing in one or more qualified Missouri opportunity zone investments, ninety percent of the assets of which consist of such investments, as measured on the last day of the first six-month period of the fund's tax year and the last day of the fund's tax year, and that is certified or otherwise approved by the department in accordance with rules promulgated under this section;

  (8)  "Qualified Missouri opportunity zone investment", an equity investment made by a taxpayer in:

  (a)  Investment property located within a Missouri opportunity zone; or

  (b)  An operating business located within a Missouri opportunity zone;

  (9)  "Taxpayer", a person subject to Missouri income tax under chapter 143, including income reported on a pass-through basis by an owner, partner, or member of a partnership, limited liability company, or S corporation.  The term taxpayer shall not include any entity subject to Missouri corporate income tax, including any C corporation.

  3.  (1)  A taxpayer may elect to defer payment of Missouri income tax liability for a tax year if the amount of such Missouri income tax liability is invested, in the manner prescribed by this section, in:

  (a)  A qualified Missouri opportunity zone investment; or

  (b)  A qualified Missouri opportunity zone fund that invests in one or more qualified Missouri opportunity zone investments.

  (2)  The deferral authorized by this subsection shall apply solely to Missouri income tax liabilities as defined in this section.

  (3)  Eligibility under this section shall not be conditioned on the residency of the taxpayer, provided that the deferral authorized by this section shall apply only for tax years in which the taxpayer remains subject to Missouri income tax under chapter 143.

  (4)  The election to defer payment of Missouri income tax liability under this section may be made with respect to all or any portion of a taxpayer's Missouri income tax liability for a tax year, in the manner prescribed by the department of revenue.

  4.  To defer Missouri income tax liability of a tax year under this section, a taxpayer shall, by the due date of the taxpayer's individual income tax return for that tax year, without regard to extensions, both file the election to defer Missouri income tax liability in the manner prescribed by the department of revenue and make the qualified Missouri opportunity zone investment.

  5.  The deferral of payment of Missouri income tax liability under this section shall continue until the earliest occurrence of an inclusion event, including:

  (1)  The sale, exchange, or other disposition of the qualified Missouri opportunity zone investment;

  (2)  When the investment ceases to qualify as a qualified Missouri opportunity zone investment;

  (3)  Ten years from the date of the qualified Missouri opportunity zone investment;

  (4)  In the case of an operating business, the failure to commence active trade or business operations, including employment of personnel or generation of revenue from goods or services within the zone, within twenty-four months of the initial qualified Missouri opportunity zone investment, as determined by the department; or

  (5)  (a)  In the case of investment property, failure to satisfy the requirements of paragraph (b) of this subdivision.

  (b)  A qualified Missouri opportunity zone investment in investment property shall continue to qualify for deferral under this section so long as one or more of the following conditions is satisfied:

  a.  The investment property is placed into active commercial or residential use, including leasing, occupancy, or other income-producing operation, within thirty months following the initial qualified Missouri opportunity zone investment; or

  b.  Within thirty months of the date of the initial qualified Missouri opportunity zone investment in the investment property, the taxpayer, either directly or through one or more affiliated entities, invests an amount equal to or greater than the adjusted basis of the property, excluding land, in improvements that materially enhance the value, utility, or productive use of the property.  For purposes of this subparagraph, the required investment amount may be satisfied through any combination of capital contributions, including amounts attributable to Missouri income tax liability for which payment is deferred under this section and other cash or equity contributions invested in the property.  Debt financing shall not be treated as an equity investment for purposes of satisfying this test.

  (6)  In the case of a qualified Missouri opportunity zone investment, if such operating business or investment property generates net income attributable to the investment during any tax year prior to the expiration of the deferral period, the amount of Missouri income tax liability for which payment was previously deferred under this section shall be included in Missouri income tax for such tax year in an amount equal to four and seven-tenths percent of the taxpayer's share of the net income so generated, and shall be due and payable with the return for such tax year or, if no return is required for the tax year, shall be due and payable on the fifteenth day of the fourth month following the close of the taxpayer's tax year.  Any remaining deferred amount shall continue to be deferred in accordance with this section.

  6.  If a qualified Missouri opportunity zone fund holds a qualified Missouri opportunity zone investment and an inclusion event occurs with respect to such investment, the inclusion event shall flow through to, and be recognized by, each taxpayer holding a direct or indirect investment.  Each such taxpayer shall recognize such inclusion event pro rata in proportion to such taxpayer's allocable share of the investment, as applicable and in accordance with this section.  Any Missouri income tax liability arising from such inclusion event shall be determined, reported, and paid by each such taxpayer in accordance with this section.

  7.  Eligibility for, or participation in, any federal opportunity zone program shall not be required to qualify for benefits under this section, nor shall federal designation be construed to limit or expand eligibility under Missouri law.

  8.  No Missouri income tax liability payment shall be deferred, excluded, or otherwise reduced under this section more than once, nor shall any taxpayer structure transactions with affiliated entities for the primary purpose of duplicating or extending deferral benefits.

  9.  Notwithstanding the repeal, expiration, or nonrenewal of this section, any taxpayer that has made a qualified Missouri opportunity zone investment prior to such repeal, expiration, or nonrenewal shall remain eligible for the deferral benefits provided under this section with respect to such investment, subject to the terms and conditions in effect at the time the investment was made.  Notwithstanding any provision of law to the contrary, within three years of the date that all or part of the Missouri income tax liability deferred under this section is required to be paid as a result of an inclusion event or other cause under this section, the department of revenue may issue a notice of deficiency for, and assess or reassess, such tax, along with any applicable interest, additions to tax, and penalties.  Nothing in the preceding sentence shall be construed to shorten any limitations period applicable under other provisions of law.

  10.  The department of revenue, in consultation with the department of economic development, shall administer this section and may require reasonable documentation to verify:

  (1)  The amount of Missouri income tax liability payment deferred;

  (2)  The nature and location of the qualified Missouri opportunity zone investment; and

  (3)  Compliance with the investment timing, active use, capital deployment, holding period, and inclusion-event requirements of this section.

  11.  (1)  Any taxpayer claiming a deferral of payment of Missouri income tax liability under this section shall report such deferral on the taxpayer's Missouri income tax return for the taxable year in which the tax would otherwise be due and for each taxable year thereafter during which such tax payment remains deferred.

  (2)  The department shall prescribe the form and manner of reporting required under this section, including a form on which the taxpayer shall identify:

  (a)  The amount of Missouri income tax liability for which deferral is claimed;

  (b)  The taxable year to which such tax liability relates;

  (c)  The date of such contribution; and

  (d)  Such other information as is reasonably necessary to verify the taxpayer's eligibility for the deferral.

  (3)  As a condition of claiming or maintaining a deferral under this section, the taxpayer shall attach to the taxpayer's Missouri income tax return the form prescribed by the department, together with a certification executed by an independent certified public accountant stating that the amount of Missouri income tax liability for which deferral is claimed has been invested in a qualified investment in accordance with this section.

  (4)  The department may require the taxpayer to provide documentation reasonably necessary to verify compliance with this section, including documentation evidencing the qualified investment and continued eligibility for deferral.

  (5)  If the taxpayer fails to timely file the form or certification required under this section, or if the department determines that the taxpayer is not eligible for the claimed deferral, the deferred Missouri income tax liability shall be paid by the original individual income tax payment deadline for the taxable year as to which such failure or determination applies, together with any interest, penalties, or additions otherwise provided by law.

  12.  The department shall promulgate rules with respect to the certification, approval, and other requirements of a qualified Missouri opportunity zone fund.  The department of revenue shall promulgate rules to otherwise implement this section.  Such rules shall be consistent with and reasonably necessary to carry out the purposes, structure, and operative provisions of this section, including the encouragement of long-term, productive investment within Missouri opportunity zones and the prevention of tax deferral without meaningful economic activity.  Rules promulgated under this subsection shall not expand or restrict eligibility, alter the nature of qualifying investments, or modify the deferral or inclusion mechanics established by 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.

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