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Missouri Bill Exempts Stimulus Payments from State Taxes and Applies Some Property Tax Provisions State Wide

07.24.2020

On July 14, Missouri Governor Mike Parson signed a bill that, among other things, exempts stimulus payments authorized under the CARES Act from being factored into a taxpayer’s adjusted gross income for Missouri income tax purposes.

Stimulus Payments

The bill excludes stimulus payments authorized under the CARES Act from being factored into a taxpayer’s adjusted gross income for Missouri income tax purposes. The stimulus payment — or economic impact payment, as the IRS calls it — is technically a refundable tax credit for 2020.

Currently, taxpayers are required to itemize deductions to include any federal income tax refund amounts in his or her Missouri adjusted gross income if such taxpayer previously claimed a deduction for federal income tax liability on his or her Missouri income tax return. Under the bill, any amount of a federal income tax refund attributable to a tax credit received under the CARES Act will not be included in the taxpayer's Missouri adjusted gross income.

Currently, a taxpayer can deduct from his or her Missouri adjusted gross income a portion of his or her federal income taxes paid. Under the bill, any federal income tax credits received under the CARES Act will not be considered when determining the amount of federal income tax liability allowable as a deduction under current law.

As part of Missouri Senate Bill 676 (SB Bill 676), taxpayers can also expect the following 2020 tax impacts.

Partnerships

The bill’s partnership provisions allow the state (via affirmative election by the partnership) to automatically capture a partnership's tax liability that changes after an IRS audit instead of requiring each partner to file an amended return. 

Property Taxes

SB Bill 676 has taken several property tax provisions that are currently in place for St. Louis County and applied them to other counties in Missouri.

Currently, the St. Louis County Assessor is required to conduct a physical inspection of residential real property prior to increasing the assessed valuation of a property by more than 15 percent since the last assessment, and is required to provide written notification of such inspection. The physical inspection shall include an on-site personal observation of all exterior portions of the land and any buildings and improvements to which the inspector has reasonable and lawful access. This bill applies these requirements to all counties (Section 137.115, RSMo).

For property assessment appeals to the boards of equalization in the City of St. Louis, St. Charles County and St. Louis County, currently the assessor has the burden to prove that the valuation does not exceed the true market value of the property and that an inspection was performed. If the assessor fails to provide evidence that the inspection was performed, the property owner will prevail on the appeal as a matter of law. This bill applies such provisions to appeals in all counties for which the increase in assessed valuation for the subject property exceeds 15 percent (Section 138.060).

This bill modifies the appeal deadlines to provide that taxpayers must appeal by the second Monday in July, and the Board of Equalization will meet on the third Monday in July.

If you have questions about how these changes impact you, please contact Pam Huelsman, Principal, State and Local Tax, at phuelsman@bswllc.com or 314.983.1392, or Jenna Kerwood, Partner, Property Tax Services, at jkerwood@bswllc.com or 314.983.1360.

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