Section 92.086

Title VII CITIES, TOWNS AND VILLAGES

Chapter 92

Effective - 28 Aug 2005   

  92.086.  List of municipalities with business license tax ordinances to be published — revenue director to collect tax, when — basis for tax — rulemaking authority — intent of general assembly — review of revenue collected — audit authority. — 1.  On or before January 1, 2006, the director shall publish a list of the municipalities which have, prior to August 28, 2005, enacted ordinances imposing a business license tax on a telecommunications company.  The list shall contain:

  (1)  The name of the municipality imposing the tax;

  (2)  The name of the tax as denoted by the municipality;

  (3)  The citation to the municipal code provisions imposing the tax; and

  (4)  The percentage of gross receipts.

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The director shall not be required to include any figures for the percentage of gross receipts if the municipality in question at the time of August 28, 2005, had an ordinance which imposed a flat fee instead of a fee based on gross receipts as its business license tax.  In compiling the list, the director shall collect information from telecommunications companies, municipalities, municipal codes, and other reliable sources.

  2.  (1)  On or before February 1, 2006, all telecommunications companies in Missouri shall provide the director and the state auditor with the amount of municipal business license tax which they paid each Missouri municipality identified by the director in accordance with subsection 1 of this section for the previous four quarters.  On or before February 1, 2006, all telecommunications companies in Missouri shall provide the director and the state auditor with an itemized list establishing their gross receipts for the previous four quarters for each category of gross receipts in each municipality identified by the director in accordance with subsection 1 of this section upon which a sales tax is paid.

  (2)  On or before February 1, 2006, each municipality shall provide the director and state auditor with the total amount of tax revenue collected for the previous fiscal year of taxable gross receipts from telecommunications companies.  Any inconsistency or dispute arising from the information provided by the municipalities and telecommunications companies shall be resolved through an audit performed by the state auditor.

  3.  Beginning on July 1, 2006, the director shall henceforth collect, administer, and distribute telecommunications business license tax revenues in accordance with the provisions of sections 92.074 to 92.095.

  4.  Notwithstanding the provisions of any municipal business license tax ordinance, effective July 1, 2006, all business license taxes shall be based solely and exclusively on those gross receipts of telecommunications companies for the retail sale of telecommunications services which are subject to taxation under sections 144.010 and 144.020. Any provisions in any municipal taxing ordinances which provide different definitions, rules, or provisions are expressly preempted and are null and void.

  5.  The director is authorized to promulgate regulations to establish the appropriate procedures for collecting, administering, and distributing such taxes.  A telecommunications company shall file a quarterly return with the director with an attached schedule setting forth the total amount of taxable gross receipts for the quarter and the amount of business license tax due to each municipality.  The director shall distribute the appropriate amounts, as set forth in this section, to the municipalities.  In exchange for its collection, administration, and distribution functions, the department of revenue shall retain a collection fee of up to one percent (not to exceed the actual costs incurred) on all funds collected and distributed and shall be allowed to collect the interest off such funds during the time between collection and distribution.  In no event shall the director fail to distribute the collected funds to a municipality more than thirty days after the collection of the funds.

  6.  It is the intent of the general assembly that sections 92.074 to 92.095 comply with Article X, Section 22 of the Missouri Constitution, so that the application of sections 92.074 to 92.095 shall have a revenue-neutral effect.  Because business license taxes shall now be based on the gross receipts subject to the sales tax, it is anticipated that the base of the existing business license taxes in most cases shall be broadened, so in order to comply with Article X, Section 22 of the Missouri Constitution, the municipality shall adjust the gross receipts percentage rate identified by the director in accordance with subsection 2 of this section so that the amount collectible, in total from all telecommunications companies, excluding the collection fee authorized in subsection 5 as defined herein, before and immediately after enactment remains the same in each municipality.  If the determination is made by a municipality that in order to comply with Article X, Section 22 of the Missouri Constitution the gross receipts percentage rate must be increased, such increase shall be passed by a majority vote of the qualified voters voting in that municipality.  The existing tax base shall be an amount equal to the total amount of telecommunications business license taxes collected by a municipality for fiscal year 2005, increased by fifty percent of the difference between such amount and the business license tax receipts that would have been yielded by applying the gross receipts percentage rate identified in accordance with subsection 1 of this section to the total gross receipts for all wireless telecommunications services provided by telecommunications companies as identified in 47 U.S.C. Section 332(D)(1) and 47 C.F.R. Parts 22 or 24 in such fiscal year attributable to the municipality.  Based upon the rate information received from the director under this section, each municipality shall, no later than April 1, 2006, promulgate and publish the revenue-neutral rates to be applied in each municipality.  Such tax rates shall be the applicable business license tax rate for bills rendered on or after July 1, 2006.  Any percentages in any ordinance that are contrary to that established by the municipality herein are null and void.  If any municipal business license tax ordinance as of January 1, 2005, had a provision stating that the tax only applied to business customers, the new calculated rate under this section also shall be determined based only on business customers and shall apply only to business customers.

  7.  On or before April 1, 2007, the director, in consultation with the state auditor and municipalities, shall examine revenues collected and forecast whether a shortfall or excess in municipal revenues for each municipality is likely to occur for the fiscal year ending June 30, 2007, due to data reporting errors or other errors in the calculation of the revenue-neutral tax rate.  Section 32.057 shall not restrict the disclosure of information to perform such consultation.  If a shortfall or excess is expected, the director, after review and comment from municipalities and telecommunications companies, shall promulgate and publish an adjustment in the rate in such municipalities.  Such tax rate adjustment, if necessary, shall apply to bills issued after July 1, 2007.

  8.  The director shall be notified in writing within thirty days of any change in the municipal business license tax rate adopted by a municipality.  The director shall promulgate such rate changes, but such rate changes may only take effect on the first day of a calendar quarter and only after a minimum of ninety days notice from the director to a telecommunications company.  Any subsequent increase in the business license tax rate passed through an ordinance by a municipality which is above that rate as established by the municipality under subsection 6 of this section shall be passed by a majority vote of the qualified voters voting in that municipality.  No municipal tax rate shall exceed the cap provided in subsection 9 of this section.

  9.  Notwithstanding the provisions of subsections 3 to 8 of this section or any other provision of law to the contrary, for any municipality not subject to the provisions of subsection 10 of this section, the maximum rate of taxation on gross receipts shall not exceed five percent for bills rendered on or after July 1, 2006, except if the business license tax rate for any municipality, as calculated in subsection 6 of this section, or if necessary, subsection 7 of this section, is determined to be greater than five percent, then, notwithstanding the provisions of such subsections, the business license tax rates for such municipality on and after July 1, 2006, shall be as follows:

  (1)  For bills rendered between July 1, 2006, and June 30, 2008, the rate shall be the actual adjusted rate as determined by subsection 6 of^* this section, or, if necessary, subsection 7 of this section;

  (2)  For bills rendered between July 1, 2008, and June 30, 2010, the rate shall be half the sum of the rate determined in subdivision (1) of this subsection and five percent; and

  (3)  For all bills rendered on and after July 1, 2010, five percent.

  10.  (1)  Any municipality which prior to November 4, 1980, had an ordinance imposing a business license tax on telecommunications companies which specifically included the words "wireless", "cell phones", or "mobile phones" in its business license tax ordinance as revenues upon which a business license tax could be imposed, and had not limited its tax to local exchange telephone service or landlines, and had taken affirmative action to collect such tax from wireless telecommunications providers prior to January 15, 2005, shall not be required to adjust its business license tax rate as provided in subsection 6 of this section and shall not be subject to the provisions of subsection 9 of this section.

  (2)  Any municipality which has an ordinance or an amendment to an ordinance imposing a business license tax on telecommunications companies which was authorized or amended by a public vote subsequent to November 4, 1980, and such authorization specifically included the terms "wireless", "cell phones", or "mobile telephones" as revenues upon which a business license tax could be imposed, and had not limited its tax to local exchange telephone service or landlines, and had taken affirmative action to collect such tax from wireless telecommunications providers prior to January 15, 2005, shall not be required to adjust its business license tax rate as provided in subsection 6 of this section and shall not be subject to the provisions of subsection 9 of this section.

  11.  For purposes of sections 92.074 to 92.095, the director and any municipality shall have the authority to audit any telecommunications company.  Notwithstanding the provisions of section 32.057, the director of revenue shall furnish any municipality with information it requests to permit the municipality to review and audit the payments of any telecommunications company.

  12.  The statute of limitations shall be three years for the alleged nonpayment or underpayment of the business license tax.

  13.  Any telecommunications company is authorized to pass through to its retail customers all or part of the business license tax.

  14.  The provisions of subsection 5 of section 144.190 and subdivision (3) of subsection 12 of section 32.087 shall apply to the tax imposed under sections 92.074 to 92.095.

  15.  Unless specifically stated otherwise in sections 92.074 to 92.095, taxpayer remedies, enforcement mechanisms, tax refunds, tax protests, assessments, and all other procedures shall be the same as those provided in chapter 144.

  16.  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, 2005, shall be invalid and void.

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(L. 2005 H.B. 209)

*Word "or" appears in original rolls.

(2006) Subsection 10 of section 92.086 is a special law prohibited under subdivision (30), Section 40, Article III, Constitution of Missouri.  Under the nonseverability clause in section 92.092, sections 92.074, 92.077, 92.080, 92.083, 92.086, and 92.089 are invalid in their entirety.  City of Springfield v. Sprint Spectrum, L.P., 203 S.W.3d 177 (Mo.).

(2019)  A statute is not a local or special law under Article III, Section 40 of the Missouri Constitution if the criteria for a class is supported by a rational or reasonable basis.  Prior court analysis, which shifted the burden of proof to the party defending a statute’s constitutionality and required the showing of substantial justification for that statute, has no basis in Article III, Sections 40 through 42, and should no longer be followed.  City of Aurora v. Spectra Communications Group, LLC, 592 S.W.3d 764 (Mo.banc).