Section 135.950

Title X TAXATION AND REVENUE

Chapter 135

Effective - 28 Aug 2021, 6 histories   

  135.950.  Definitions. — The following terms, whenever used in sections 135.950 to 135.970 mean:

  (1)  "Average wage", the new payroll divided by the number of new jobs;

  (2)  "Blighted area", the same meaning as defined pursuant to section 99.805;

  (3)  "Board", an enhanced enterprise zone board established pursuant to section 135.957;

  (4)  "Commencement of commercial operations" shall be deemed to occur during the first taxable year for which the new business facility is first put into use by the taxpayer in the enhanced business enterprise in which the taxpayer intends to use the new business facility;

  (5)  "County average wage", the average wages in each county as determined by the department for the most recently completed full calendar year.  However, if the computed county average wage is above the statewide average wage, the statewide average wage shall be deemed the county average wage for such county for the purpose of determining eligibility.  The department shall publish the county average wage for each county at least annually.  Notwithstanding the provisions of this subdivision to the contrary, for any taxpayer that in conjunction with their project is relocating employees from a Missouri county with a higher county average wage, such taxpayer shall obtain the endorsement of the governing body of the community from which jobs are being relocated or the county average wage for their project shall be the county average wage for the county from which the employees are being relocated;

  (6)  "Department", the department of economic development;

  (7)  "Director", the director of the department of economic development;

  (8)  "Employee", a person employed by the enhanced business enterprise that is scheduled to work an average of at least one thousand hours per year, and such person at all times has health insurance offered to him or her, which is partially paid for by the employer;

  (9)  "Enhanced business enterprise", an industry or one of a cluster of industries that is either:

  (a)  Identified by the department as critical to the state's economic security and growth; or

  (b)  Will have an impact on industry cluster development, as identified by the governing authority in its application for designation of an enhanced enterprise zone and approved by the department; but excluding gambling establishments (NAICS industry group 7132), retail trade (NAICS sectors 44 and 45), educational services (NAICS sector 61), religious organizations (NAICS industry group 8131), public administration (NAICS sector 92), and food and drinking places (NAICS subsector 722), however, notwithstanding provisions of this section to the contrary, headquarters or administrative offices of an otherwise excluded business may qualify for benefits if the offices serve a multistate territory.  In the event a national, state, or regional headquarters operation is not the predominant activity of a project facility, the new jobs and investment of such headquarters operation is considered eligible for benefits under this section if the other requirements are satisfied.  Service industries may be eligible only if a majority of its annual revenues will be derived from out of the state;

  (10)  "Existing business facility", any facility in this state which was employed by the taxpayer claiming the credit in the operation of an enhanced business enterprise immediately prior to an expansion, acquisition, addition, or replacement;

  (11)  "Facility", any building used as an enhanced business enterprise located within an enhanced enterprise zone, including the land on which the facility is located and all machinery, equipment, and other real and depreciable tangible personal property acquired for use at and located at or within such facility and used in connection with the operation of such facility;

  (12)  "Facility base employment", the greater of the number of employees located at the facility on the date of the notice of intent, or for the twelve-month period prior to the date of the notice of intent, the average number of employees located at the facility, or in the event the project facility has not been in operation for a full twelve-month period, the average number of employees for the number of months the facility has been in operation prior to the date of the notice of intent;

  (13)  "Facility base payroll", the total amount of taxable wages paid by the enhanced business enterprise to employees of the enhanced business enterprise located at the facility in the twelve months prior to the notice of intent, not including the payroll of owners of the enhanced business enterprise unless the enhanced business enterprise is participating in an employee stock ownership plan.  For the purposes of calculating the benefits under this program, the amount of base payroll shall increase each year based on the consumer price index or other comparable measure, as determined by the department;

  (14)  "Governing authority", the body holding primary legislative authority over a county or incorporated municipality;

  (15)  "Megaproject", any manufacturing or assembling facility, approved by the department for construction and operation within an enhanced enterprise zone, which satisfies the following:

  (a)  The new capital investment is projected to exceed three hundred million dollars over a period of eight years from the date of approval by the department;

  (b)  The number of new jobs is projected to exceed one thousand over a period of eight years beginning on the date of approval by the department;

  (c)  The average wage of new jobs to be created shall exceed the county average wage;

  (d)  The taxpayer shall offer health insurance to all new jobs and pay at least eighty percent of such insurance premiums; and

  (e)  An acceptable plan of repayment, to the state, of the tax credits provided for the megaproject has been provided by the taxpayer;

  (16)  "NAICS", the 1997 edition of the North American Industry Classification System as prepared by the Executive Office of the President, Office of Management and Budget. Any NAICS sector, subsector, industry group or industry identified in this section shall include its corresponding classification in subsequent federal industry classification systems;

  (17)  "New business facility", a facility that does not produce or generate electrical energy from a renewable energy resource and satisfies the following requirements:

  (a)  Such facility is employed by the taxpayer in the operation of an enhanced business enterprise. Such facility shall not be considered a new business facility in the hands of the taxpayer if the taxpayer's only activity with respect to such facility is to lease it to another person or persons.  If the taxpayer employs only a portion of such facility in the operation of an enhanced business enterprise, and leases another portion of such facility to another person or persons or does not otherwise use such other portions in the operation of an enhanced business enterprise, the portion employed by the taxpayer in the operation of an enhanced business enterprise shall be considered a new business facility, if the requirements of paragraphs (b), (c), and (d) of this subdivision are satisfied;

  (b)  Such facility is acquired by, or leased to, the taxpayer after December 31, 2004. A facility shall be deemed to have been acquired by, or leased to, the taxpayer after December 31, 2004, if the transfer of title to the taxpayer, the transfer of possession pursuant to a binding contract to transfer title to the taxpayer, or the commencement of the term of the lease to the taxpayer occurs after December 31, 2004;

  (c)  If such facility was acquired by the taxpayer from another taxpayer and such facility was employed immediately prior to the acquisition by another taxpayer in the operation of an enhanced business enterprise, the operation of the same or a substantially similar enhanced business enterprise is not continued by the taxpayer at such facility; and

  (d)  Such facility is not a replacement business facility, as defined in subdivision (27) of this section;

  (18)  "New business facility employee", an employee of the taxpayer in the operation of a new business facility during the taxable year for which the credit allowed by section 135.967 is claimed, except that truck drivers and rail and barge vehicle operators and other operators of rolling stock for hire shall not constitute new business facility employees;

  (19)  "New business facility investment", the value of real and depreciable tangible personal property, acquired by the taxpayer as part of the new business facility, which is used by the taxpayer in the operation of the new business facility, during the taxable year for which the credit allowed by 135.967 is claimed, except that trucks, truck-trailers, truck semitrailers, rail vehicles, barge vehicles, aircraft and other rolling stock for hire, track, switches, barges, bridges, tunnels, and rail yards and spurs shall not constitute new business facility investments.  The total value of such property during such taxable year shall be:

  (a)  Its original cost if owned by the taxpayer; or

  (b)  Eight times the net annual rental rate, if leased by the taxpayer.  The net annual rental rate shall be the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from subrentals.  The new business facility investment shall be determined by dividing by twelve the sum of the total value of such property on the last business day of each calendar month of the taxable year.  If the new business facility is in operation for less than an entire taxable year, the new business facility investment shall be determined by dividing the sum of the total value of such property on the last business day of each full calendar month during the portion of such taxable year during which the new business facility was in operation by the number of full calendar months during such period;

  (20)  "New job", the number of employees located at the facility that exceeds the facility base employment less any decrease in the number of the employees at related facilities below the related facility base employment.  No job that was created prior to the date of the notice of intent shall be deemed a new job;

  (21)  "Notice of intent", a form developed by the department which is completed by the enhanced business enterprise and submitted to the department which states the enhanced business enterprise's intent to hire new jobs and request benefits under such program;

  (22)  "Related facility", a facility operated by the enhanced business enterprise or a related company in this state that is directly related to the operation of the project facility;

  (23)  "Related facility base employment", the greater of:

  (a)  The number of employees located at all related facilities on the date of the notice of intent; or

  (b)  For the twelve-month period prior to the date of the notice of intent, the average number of employees located at all related facilities of the enhanced business enterprise or a related company located in this state;

  (24)  "Related taxpayer":

  (a)  A corporation, partnership, trust, or association controlled by the taxpayer;

  (b)  An individual, corporation, partnership, trust, or association in control of the taxpayer; or

  (c)  A corporation, partnership, trust or association controlled by an individual, corporation, partnership, trust or association in control of the taxpayer.  "Control of a corporation" shall mean ownership, directly or indirectly, of stock possessing at least fifty percent of the total combined voting power of all classes of stock entitled to vote, "control of a partnership or association" shall mean ownership of at least fifty percent of the capital or profits interest in such partnership or association, and "control of a trust" shall mean ownership, directly or indirectly, of at least fifty percent of the beneficial interest in the principal or income of such trust; ownership shall be determined as provided in Section 318 of the Internal Revenue Code of 1986, as amended;

  (25)  "Renewable energy generation zone", an area which has been found, by a resolution or ordinance adopted by the governing authority having jurisdiction of such area, to be a blighted area and which contains land, improvements, or a lock and dam site which is unutilized or underutilized for the production, generation, conversion, and conveyance of electrical energy from a renewable energy resource;

  (26)  "Renewable energy resource", shall include:

  (a)  Wind;

  (b)  Solar thermal sources or photovoltaic cells and panels;

  (c)  Dedicated crops grown for energy production;

  (d)  Cellulosic agricultural residues;

  (e)  Plant residues;

  (f)  Methane from landfills, agricultural operations, or wastewater treatment;

  (g)  Thermal depolymerization or pyrolysis for converting waste material to energy;

  (h)  Clean and untreated wood such as pallets;

  (i)  Hydroelectric power, which shall include electrical energy produced or generated by hydroelectric power generating equipment, as such term is defined in section 137.010;

  (j)  Fuel cells using hydrogen produced by one or more of the renewable resources provided in paragraphs (a) to (i) of this subdivision; or

  (k)  Any other sources of energy, not including nuclear energy, that are certified as renewable by rule by the department of economic development;

  (27)  "Replacement business facility", a facility otherwise described in subdivision (17) of this section, hereafter referred to in this subdivision as "new facility", which replaces another facility, hereafter referred to in this subdivision as "old facility", located within the state, which the taxpayer or a related taxpayer previously operated but discontinued operating on or before the close of the first taxable year for which the credit allowed by this section is claimed.  A new facility shall be deemed to replace an old facility if the following conditions are met:

  (a)  The old facility was operated by the taxpayer or a related taxpayer during the taxpayer's or related taxpayer's taxable period immediately preceding the taxable year in which commencement of commercial operations occurs at the new facility; and

  (b)  The old facility was employed by the taxpayer or a related taxpayer in the operation of an enhanced business enterprise and the taxpayer continues the operation of the same or substantially similar enhanced business enterprise at the new facility.  Notwithstanding the preceding provisions of this subdivision, a facility shall not be considered a replacement business facility if the taxpayer's new business facility investment, as computed in subdivision (19) of this section, in the new facility during the tax period for which the credits allowed in section 135.967 are claimed exceed one million dollars and if the total number of employees at the new facility exceeds the total number of employees at the old facility by at least two;

  (28)  "Same or substantially similar enhanced business enterprise", an enhanced business enterprise in which the nature of the products produced or sold, or activities conducted, are similar in character and use or are produced, sold, performed, or conducted in the same or similar manner as in another enhanced business enterprise.

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(L. 2004 S.B. 1155 § 135.1050, A.L. 2007 1st Ex. Sess. H.B. 1, A.L. 2008 H.B. 2393, A.L. 2011 H.B. 737, A.L. 2018 S.B. 975 & 1024 Revision, A.L. 2021 S.B. 153 & 97)