PURPOSE: This rule sets forth guidelines for the submission, acceptance and proceedings upon a Certificate of Deposit that has been submitted in lieu of a Missouri Use Tax Cash Bond.

1. (1) A Certificate of Deposit (CD) issued by a stateor federally-chartered financial institution may be submitted to the Missouri Department of Revenue in lieu of a Use Tax Cash Bond.
2. (2) The CD shall be for a period of not less than five (5) years (sixty (60) months). Interest shall be compounded and paid at maturity.
3. (3) The CD shall be in the names of the Missouri Department of Revenue and of the taxpayer submitting the document. The CD shall be a new CD which is assigned to the Department of Revenue. The Certificate of Deposit shall be delivered to the Department of Revenue along with the registration application form and assignment of Certificate of Deposit form in order to obtain a Use Tax License.
4. (4) The CD may be released by the Department of Revenue upon completion of a five (5)-year period of satisfactory tax compliance. Satisfactory tax compliance shall mean that for a period of five (5) consecutive years immediately preceding application for release of the bond, the taxpayer has filed all returns and paid all taxes, additions and interest due on a timely basis. The CD may also be released when the taxpayer ceases to do business, files a final return with the director of revenue and owes no tax, additions or interest. The taxpayer shall file an application (on forms provided by the Department of Revenue) to obtain a release of the CD. The release application should be filed with the director of revenue sixty (60) days prior to the maturity date of the CD.
5. (5) If a delinquency occurs, the Department of Revenue may redeem the CD. If the proceeds from the CD exceed the delinquency, any remainder shall be converted to a cash bond and shall be held by the director of revenue. Interest proceeds for the CD shall become part of the new cash bond. The cash bond may be returned to the taxpayer upon completion of a five (5)-year period of satisfactory tax compliance.
6. (6) The Department of Revenue shall not reinvest proceeds from a CD after it has been converted to a cash bond.
7. (7) The Department of Revenue shall not be responsible for any penalties or forfeited interest as a result of cashing a CD prior to maturity or for any other reason.
8. (8) The taxpayer shall be liable for all taxes on the interest or other earnings derived from the CD. This is the case even if the Department of Revenue seizes the CD (and accumulated interest) for payment of a delinquency incurred by the taxpayer. The taxpayer shall provide its federal tax identification number to the banking institution and an information return for the interest earnings shall be issued under the taxpayer’s federal identification number.

AUTHORITY: sections 144.625 and 144.705, RSMo 1994.* Original rule filed Dec. 4, 1990, effective April 29, 1991. Amended: Filed Feb. 4, 1991, effective June 10, 1991. *Original authority: 144.625, RSMo 1959, amended 1986 and 144.705, RSMo 1959.