PURPOSE: In those situations where an application for tax credits has been approved, the Department of Revenue shall grant a tax credit against any tax which may be due as stipulated in section 32.115, RSMo. This rule establishes the total amounts of tax credits, computation of tax credits and proof of contribution. This rule implements sections 32.110, 32.115, 32.117 and 32.120, RSMo.

1. (1) Qualifying individuals are allowed credit for donations of cash or any goods, materials and services for which they normally receive payment.
2. (2) The total tax credit approved for a business firm shall not exceed two hundred fifty thousand dollars ($250,000) annually, except that the credit may exceed two hundred fifty thousand dollars ($250,000) annually and shall not be limited if community services, crime prevention, education, job training or neighborhood assistance as defined by section 32.105, RSMo is rendered in an area defined by federal or state law as an impoverished, economically distressed or blighted area or as a neighborhood experiencing problems endangering its existence as a viable and stable neighborhood, or if the community services, crime prevention, education, job training or neighborhood assistance is limited to impoverished persons.
3. (3) No tax credit shall be approved for any bank, bank and trust company, insurance company, trust company, national bank, savings association or building and loan association for activities that are part of its normal course of business.
4. (4) Any portion of the tax credit not claimed by the business firm in the period the donation was made may be carried over for the next five (5) succeeding calendar or fiscal years or until the full credit has been issued, whichever occurs first.

5. (5) Required documentation for the tax credit depends on the form of the donation. Evidence of donation must be attached to the credit application and may include, but not necessarily be limited to, one (1) of the following:

   1. (A) Cash donations shall require a copy of the cancelled endorsed check(s), both sides, automatic deposit, bank statements or any other form of documentation acceptable to the department. When a program is sponsored by an organization that conducts many varied programs, a donation in the form of a check under an approved project name must be made payable to the organization and specifically noted for that project. The organization must endorse the checks in the name of the specific program and, in certain instances, open a separate bank account in the program’s name;
   2. (B) Real estate donations shall have a copy of the deed and the required number of appraiser’s reports. All appraisals must be performed by state-licensed or certified appraisers;
   3. (C) Equipment or supplies shall have a copy of the invoice or other documentation showing the cost to the donor or current fair market value, whichever is less;
   4. (D) Donations of labor and technical assistance shall include a statement signed by the employee and employer itemizing time spent on the project and the employee’s regular hourly wage; or
   5. (E) Donation of professional services shall require an invoice detailing the nature and dates of services rendered, indicating standard billing amount, less any payment received.
6. (6) In the event that a tax credit was improperly approved, the department will notify the business firm of the reason for the adjustment and notify the Department of Revenue that the tax credit has been adjusted and the reason for the adjustment.
7. (7) The director of the Department of Economic Development will transmit in writing to the director of the Department of Revenue the necessary information on the amount of tax credit allowable to the business firms.
8. (8) If the business firm making an investment is a partnership, the approved tax credits shall be apportioned to the partners in direct proportion to their share(s) of ownership of the partnership.
9. (9) If the business firm making an investment is a corporation described in section 143.471, RSMo, the tax credit shall be apportioned to each of the shareholders in direct proportion to their share of ownership of the business.

AUTHORITY: section 32.115, RSMo Supp. 1990.* Original rule filed Jan. 10, 1978, effective April 13, 1978. Rescinded and readopted: Filed Sept. 7, 1980, effective Feb. 10, 1981. Rescinded and readopted: Filed Sept. 14, 1982, effective Dec. 11, 1982. Amended: Filed Jan. 3, 1992, effective Aug. 6, 1992. 4 CSR 85-2

*Original authority: 32.115, RSMo 1977, amended 1980, 1982, 1985, 1986, 1989, 1990, 1993, 1995, 1996, 1998, 1999.