PURPOSE: This rule clarifies the creditability of personal property taxes paid by banking institutions on personal property not held for lease or rental to others.

1. (1) Definition. Property taxes as used in this rule means property taxes on personal property not held for lease or rental to others. 12 CSR 10-10
2. (2) Subject to the conditions stated in section (3), property taxes paid (regardless of whether paid under protest) during the relevant income period to any Missouri political subdivision are allowable as credits against the bank tax imposed under section 148.030.2(2), RSMo. Credits shall be allowed even if the validity of the personal property tax assessments is challenged (by the taxpayer or by one (1) or more other banks) in an administrative or judicial proceeding and shall not subsequently be disallowed, even if the assessments are finally determined to be invalid.

3. (3) Credits shall be allowed against the bank tax as stated previously in section (2), subject to the following conditions on any bank tax return on which a bank claims credit against its section 148.030.2(2), RSMo bank tax liability:

   1. (A) The bank shall irrevocably assign to the department any refund it may receive of property taxes paid for which it claimed credit on the return, to the extent of the amount determined according to the following formula: Section 148.030.2(2), RSMo bank tax liability for the taxable year without taking into account the credits for personal property taxes paid minus the actual section 148.030.2(2), RSMo bank tax liability for the taxable year, minus seven percent (7%) of the personal property taxes paid during the relevant income period;
   2. (B) The bank shall irrevocably assign a proportionate share of any interest it actually receives on the refund;
   3. (C) If a bank receives a refund of property taxes (or interest) which it previously assigned to the department pursuant to subsections (3)(A) and (B), the bank, within fifteen (15) days following receipt, shall pay the refund, interest, or both, over to the department to the extent of the assignment. The payment shall be accompanied by a separate computation schedule for each taxable year of the amount of the property tax refund and interest payable to the department;
   4. (D) An assignment and agreement form, prescribed by the department, shall accompany claims for personal property tax credits and shall be attached to and filed as part of the original or amended bank tax return for any taxable year in which the credits are claimed; and
   5. (E) Example: MoBank pays $80,000 in personal property taxes under protest on December 31, 1988. Its section 148.030.2(2), RSMo bank tax for taxable year 1989, before taking into account credits for personal property taxes paid during the 1988 income period, is $20,000. MoBank claims credits for personal property taxes paid and executes the required refund and interest assignment. In 1990, MoBank receives a refund of the $80,000 in personal property taxes it paid in 1988, together with $8000 in interest. MoBank must pay over to the department $15,840, computed as follows:

$20,000 (Bank tax without property tax credit) 0 (Bank tax with credit) $20,000 $ 5,600 (7% of $80,000) $14,400 (Amount assigned to the department) $14,400 ÷80,000 .180 (Proportion of total property tax refund assigned to the department)

$ 8,000 × .180 $ 1,440 (Amount of interest assigned to the department)

$14,400 +$ 1,400 $15,840 (Total due department)

1. (4) Credits for personal property taxes claimed by a bank which do not comply with section (3) shall be disallowed.

AUTHORITY: section 148.100, RSMo 1986.* Original rule filed Dec. 22, 1988, effective June 11, 1989. *Original authority: 148.100, RSMo 1945.