2007 Senate Bill 30 Exemptions Matt Blunt, Governor Trish Vincent, Director.

2007 Senate Bill 30 Exemptions

Matt Blunt, Governor

Trish Vincent, Director

Omnibus Bill

What’s contained in SB 30?

Matt Blunt, Matt Blunt, GovernorGovernor

Trish Vincent, Trish Vincent, DirectorDirector

Children’s services

Coin-operated amusement devices

Annexation and detachment

Mass transit

Rental and leasing facilitiesLocal business

licenses

Tax credits Local taxes

Motor carriers

Exemptions

Tourism

Police servicesYouth and senior

services

How did SB 30 come to be?

Governor Blunt identified the expansion of manufacturing as a priority.

The tax exemption on manufacturing is a tool to aid in that expansion.

“Manufacturing is a vital part of our diverse economy, and this legislation will help level the playing field for Missouri manufacturers.” – Governor Matt Blunt, June 13, 2007

Senator Nodler sponsored SB 30 and was instrumental in its passage.



What does SB 30 do?

How does SB 30 change current statute with regard to exemptions?

– It expands the qualifying uses for some exemptions.– It creates new exemptions in some circumstances.– SB 30 only applies to state sales tax (4.225%), so

the local/county sales/use tax still applies.



Where are the manufacturing exemptions?

The exemptions outlined in today’s presentation are in section 144.054, RSMo.– Subsection 1 contains definitions.– Subsection 2 contains provisions related primarily

toward manufacturing and the processing of recovered materials.

– Subsection 3 contains provisions related to broadcasting, defense contracts, chapter 100 bonds, and railroad infrastructure.



144.054.1 Definitions

Processing – any mode of treatment, act, or series of acts performed upon materials to transform or reduce them to a different state or thing, including treatment necessary to maintain or preserve such processing by the producer at the production facility

Recovered materials – those materials which have been diverted or removed from the solid waste stream for sale, use, reuse, or recycling, whether or not they require subsequent separation and processing



144.054.2 Manufacturing Exemptions

What is exempt? “Electrical energy and

gas (natural, artificial, or propane), water, coal, energy sources, chemicals, machinery, equipment, and materials”

When is it exempt? When it is “used or

consumed in the manufacturing, processing, compounding, mining, or producing of any product”



144.054.2 Manufacturing Exemptions (continued)



When is it exempt? When it is “used or

consumed in the processing of recovered materials”



144.054.2 Manufacturing Exemptions (continued)



When is it exempt? When it is “used in

research and development related to manufacturing, processing, compounding, mining, or producing any product”



144.054.2 Manufacturing Exemptions (IMPORTANT!)

Important Note– As mentioned previously, the exemptions outlined to

this point do not apply to local sales or use taxes.



144.054.2 Manufacturing Exemptions

Biggest Changes from Current Statute– All energy becomes exempt from state sales and

use tax if it’s used for a qualifying purpose. Previously, the electricity exemptions didn’t apply to all

manufacturers. Now they will.

– The research and development language outlined in 144.054.2 expands the qualifying uses for some exemptions.

The “line” for qualifying exemptions has been moved.



144.054.3 Other Exemptions

Utilities, machinery, and equipment used or consumed directly in television or radio broadcasting

Sales and purchases of tangible personal property, utilities, services, or any other transaction subject to state or local sales or use tax when such sales are made to or purchases made by a contractor for use in fulfillment of any obligation under a defense contract with the U.S. government

Sales and leases of tangible personal property by any county, city, incorporated town, or village when it is authorized under chapter 100, RSMo, and such transaction is certified for sales tax exemption by the Missouri Dept. of Economic Development

Tangible personal property used for railroad infrastructure when it is brought into this state for processing, fabrication or other modification for use outside the state in the regular course of business



Implementation Timeline

SB 30 was signed by Governor Blunt on June 13, 2007.

Department of Revenue implementation/legal meetings began on June 18, 2007.

These exemptions will apply to purchases made on or after August 28, 2007.

During the course of the summer, the department’s implementation/legal team will continue to meet and will receive the input you provide here.



Rulemaking Process

Department of Revenue writes the rule and files it. The rule is published by the Secretary of State in the

Missouri Register 30-45 days later. Following publication, there is a 30-day comment period.

After which, the department compiles information from public comments and writes the final rule.

A copy of the final rule is filed with the Joint Committee on Administrative Rules for a 30-day review period.

After that period, the department files the final rule for publication in the Missouri Register by the Secretary of State.



Rulemaking Process (continued)

At the end of each month, all new final rules are published by the Secretary of State in the Code of State Regulations (CSR).

Rules become effective 30 days after publication in the CSR unless the agency chooses a later date or an earlier date is set by statute. At that point they have the force and effect of law.

The entire process takes about six months. Emergency rules may become necessary in the

implementation of SB 30.



What if I still have questions?

As we conduct these meetings, the input we receive from you will be shared with our implementation/legal team.

As we get closer to August 28th, we will try to have more answers.

Ultimately, if you are unsure of whether your process qualifies as a manufacturing process, you may submit a letter to the Department of Revenue along with a specific set of facts pertinent to your situation and request a letter ruling.



Letter Rulings

Letter rulings issued pursuant to section 536.021.10, RSMo, are binding on the Department of Revenue with respect to the taxpayer requesting the ruling for three years from the issue date of letter.

Letter rulings apply only to the particular fact situation stated in the letter ruling request.

Letter rulings are not binding on the Department of Revenue with respect to any other taxpayers.

Binding Letter Rulings www.dor.mo.gov/tax/rulings Regulation 12 CSR 1.020 outlines the process for requesting a

letter ruling



Requests for letter rulings must state the following

“letter ruling is requested pursuant to section 536.021.10, RSMo”

Applicant’s:



Name Address and phone number Social Security or federal identification number Missouri tax identification number Tax type at issue Issue(s) on which a letter ruling is requested

Complete, clear, and concise statement of all relevant facts related to the letter ruling request Desired result and the legal basis for that result Whether the issue, as it relates to the applicant, is presently under investigation by the Department of Revenue

Discussion



Where do we go from here?

The Department of Revenue is developing an implementation plan as we speak. This exemption will be in effect beginning August 28, 2007.

If you would like more information, please visit the department’s website www.dor.mo.gov



2007 Senate Bill 30 Exemptions

Matt Blunt, Governor

Trish Vincent, Director

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2007 Senate Bill 30 Exemptions Matt Blunt, Governor Trish Vincent, Director.

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