hb0461p_9.ps

FIRST REGULAR SESSION

[PERFECTED]

HOUSE COMMITTEE SUBSTITUTE FOR

HOUSE BILL NO. 461

93RD GENERAL ASSEMBLY


 

 

                  Reported from the Committee on Ways and Means March 31, 2005 with recommendation that House Committee Substitute for House Bill No. 461 Do Pass. Referred to the Committee on Rules pursuant to Rule 25(26)(f).

                  Reported from the Committee on Rules April 4, 2005 with recommendation that House Committee Substitute for House Bill No. 461 Do Pass with no time limit for debate.

                  Taken up for Perfection April 11, 2005. House Committee Substitute for House Bill No. 461 ordered Perfected and printed.STEPHEN S. DAVIS, Chief Clerk

0735L.06P


 

AN ACT

To repeal section 137.078, RSMo, and to enact in lieu thereof three new sections relating to assessment of business personal property.





Be it enacted by the General Assembly of the state of Missouri, as follows:


            Section A. Section 137.078, RSMo, is repealed and three new sections enacted in lieu thereof, to be known as sections 137.078, 137.079, and 137.122, to read as follows:

            137.078. 1. For purposes of this section, the following terms shall mean:

            (1) "Analog equipment", all depreciable items of tangible personal property that are used directly or indirectly in broadcasting television shows [and], radio programs, or commercials through the use of analog technology, including studio broadcast equipment, transmitter and antenna equipment, and broadcast towers;

            (2) "Applicable analog fraction", a fraction, the numerator of which is the total number of analog television sets in the United States for the immediately preceding calendar year and the denominator of which is an amount representing the total combined number of analog and digital television sets in the United States for the immediately preceding calendar year. The applicable analog fraction will be determined on an annual basis by the Missouri Broadcasters Association;

            (3) "Applicable analog percentage", the following percentages for the following years:

            Year                     2004                   2005                      2006                      2007

 of Acquisition              Tax Year            Tax Year               Tax Year              Tax Year

                                                                                                                                1%

            2006                                                                                                            1%

            2005                                                                              25%                       1%

            2004                                                50%                      25%                       1%

            2003                     75%                   50%                      25%                       1%

            2002                     75%                   50%                      25%                       1%

            2001                     75%                   50%                      25%                       1%

            2000                     75%                   50%                      25%                       1%

            1999                     75%                   50%                      25%                       1%

            1998                     75%                   50%                      25%                       1%

            Prior                     75%                   50%                      25%                      1%;

            (4) "Applicable digital fraction", a fraction, the numerator of which is the total number of digital television sets in the United States for the immediately preceding calendar year and the denominator of which is an amount representing the total combined number of analog and digital television sets in the United States for the immediately preceding calendar year. The applicable digital fraction will be determined on an annual basis by the Missouri Broadcasters Association;

            (5) "Broadcast towers", structures with a function that includes holding television or radio broadcasters' antennae, repeaters, or translators at the height required or needed to transmit over-the-air signals or enhance the transmission of the signals. This term also includes the structures at least partially used by television broadcasters or radio broadcasters to provide weather radar information to the public. For property tax assessment purposes, broadcast towers are classified as tangible personal property;

            (6) "Digital equipment", all depreciable items of tangible personal property that are used directly or indirectly in broadcasting television shows [and], radio programs, or commercials through the use of digital technology, including studio broadcast equipment, transmitter and antenna equipment, and broadcast towers;

            (7) "Radio broadcasters", all businesses that own, lease, or operate radio broadcasting stations that transmit radio shows and commercials and that are required to be licensed by the Federal Communications Commission to provide such services;

            (8) "Radio broadcasting equipment", both analog equipment and digital equipment;

            [(6)] (9) "Television broadcasters", all businesses that own, lease, or operate television broadcasting stations that transmit television shows and commercials and that are required to be licensed by the Federal Communications Commission to provide such services;

            [(7)] (10) "Television broadcasting equipment", both analog equipment and digital equipment;

            (11) "Transmitter and antenna equipment", equipment with functions that include transmitting signals from broadcast studios by increasing the power, tuning signals to the frequency allowed by regulatory authorities, and broadcasting signals to the public for television broadcasters or radio broadcasters;

            (12) "Studio broadcast equipment", studio equipment that receives, produces, modifies, controls, measures, modulates, adds to or subtracts from, or enhances signals in the process that results in over-the-air signals for television broadcasters or radio broadcasters.

            2. In response to recent action by the Federal Communications Commission, as described by the commission in the fifth report and order, docket number 97-116, for purposes of assessing all items of television broadcasting equipment that are owned and used by television broadcasters for purposes of broadcasting television shows and commercials:

            (1) The true value in money of all analog equipment shall be determined by depreciating the historical cost of such property using the depreciation tables provided in subdivision (1) of subsection 3 of this section and multiplying the results by the applicable analog percentage. The result of the second computation is multiplied by the applicable analog fraction to determine the true value in money of the analog equipment; and

            (2) The true value in money of all digital equipment shall be determined by depreciating the historical cost of such property using the depreciation tables provided in subdivision (2) of subsection 3 of this section and multiplying the results by the applicable digital fraction to determine the true value in money of the digital equipment.

            3. For purposes of subsection 2 of this section, the depreciation tables for determining the [fair] true value in money of television broadcasting equipment are as follows:

            (1) For analog equipment, the following depreciation tables will apply for the following years:

            Year                     2004                   2005                      2006                      2007

 of Acquisition              Tax Year            Tax Year               Tax Year               Tax Year

            2006                                                                                                            65%

            2005                                                                              65%                      45%

            2004                                                65%                      45%                      30%

            2003                     65%                   45%                      30%                      20%

            2002                     45%                   30%                      20%                      10%

            2001                     30%                   20%                      10%                        5%

            2000                     20%                   10%                        5%                        5%

            1999                     10%                     5%                        5%                        5%

            1998                      5%                     5%                        5%                        5%

            Prior                      5%                     5%                        5%                        5%;

            (2) For digital equipment, the following depreciation tables will apply for the following years:

            Year                     2004                   2005                      2006                      2007

of Acquisition              Tax Year            Tax Year               Tax Year              Tax Year

            2006                                                                                                            65%

            2005                                                                              65%                      45%

            2004                                                65%                      45%                      30%

            2003                     65%                   45%                      30%                      20%

            2002                     45%                   30%                      20%                      10%

            2001                     30%                   20%                      10%                        5%

            2000                     20%                   10%                        5%                        5%

            1999                     10%                     5%                        5%                        5%

            1998                      5%                     5%                        5%                        5%

            Prior                      5%                     5%                        5%                        5%.

            4. Beginning January 1, 2008, for purposes of assessing all items of television broadcasting equipment that are owned and used by television broadcasters for purposes of broadcasting television shows and commercials, the following depreciation tables will be used to determine their true value in money. The percentage shown for the first year shall be the percentage of the original cost used for January first of the year following the year of acquisition of the property, and the percentage shown for each succeeding year shall be the percentage of the original cost used for January first of the respective succeeding year as follows:

Year                  Studio Broadcast            Transmitter and          Broadcast Tower

                                Equipment               Antenna Equipment

1                                    65%                                  91%                               96%

2                                    45%                                  82%                               93%

3                                    30%                                  73%                               89%

4                                    20%                                  64%                               86%

5                                    10%                                  55%                               82%

6                                     5%                                  46%                               79%

7                                                                             37%                               75%

8                                                                             28%                               72%

9                                                                             19%                               68%

10                                                                           10%                               65%

11                                                                                                                  61% 

12                                                                                                                  58%

13                                                                                                                  54%

14                                                                                                                  51%

15                                                                                                                  47%

16                                                                                                                  44%

17                                                                                                                  40%

19                                                                                                                  33%

20                                                                                                                  30%

21                                                                                                                  27%

22                                                                                                                  24%

23                                                                                                                  21%

24                                                                                                                  18%

25                                                                                                                  15%.

 

Television broadcasting equipment in all recovery periods shall continue in subsequent years to have the depreciation percentage last listed in the appropriate column so long as it is owned or held by the taxpayer.

            5. Effective January 1, 2006, for purposes of assessing all items of radio broadcasting equipment that are owned and used by radio broadcasters for purposes of broadcasting radio programs and commercials, the following depreciation tables will be used to determine their true value in money. The percentage shown for the first year shall be the percentage of the original cost used for January first of the year following the year of acquisition of the property, and the percentage shown for each succeeding year shall be the percentage of the original cost used for January first of the respective succeeding year as follows:

Year                  Studio Broadcast             Transmitter and          Broadcast Tower

                                Equipment               Antenna Equipment

1                                    65%                                  91%                               96%

2                                    45%                                  82%                               93%

3                                    30%                                  73%                               89%

4                                    20%                                  64%                               86%

5                                    10%                                  55%                               82%

6                                     5%                                   46%                               79%

7                                                                             37%                               75%

8                                                                             28%                               72%

9                                                                             19%                               68%

10                                                                           10%                               65%

11                                                                                                                  61%

12                                                                                                                  58%

13                                                                                                                  54%

14                                                                                                                  51%

15                                                                                                                  47%

16                                                                                                                  44%

17                                                                                                                  40%

19                                                                                                                  33%

20                                                                                                                  30%

21                                                                                                                  27%

22                                                                                                                  24%

23                                                                                                                  21%

24                                                                                                                  18%

25                                                                                                                  15%.

 

Radio broadcast equipment in all recovery periods shall continue in subsequent years to have the depreciation percentage last listed in the appropriate column so long as it is owned or held by the taxpayer.

            137.079. Prior to setting its rates or rates as required by section 137.073, each taxing authority shall exclude from its total assessed valuation seventy-two percent of the total amount of assessed value of business personal property that is subject of an appeal at the state tax commission or in a court of competent jurisdiction in this state. This exclusion shall only apply to the portion of the assessed value of business personal property that is disputed in the appeal, and shall not exclude any portion of the same property that is not disputed. If the taxing authority uses a multi-rate approach as provided in section 137.073, this exclusion shall be made from the personal property class. The state tax commission shall provide each taxing authority with the total assessed value of business personal property within the jurisdiction of such taxing authority for which an appeal is pending no later than August 20 of each year. Whenever any appeal is resolved, whether by final adjudication or settlement, and the result of the appeal causes money to be paid to the taxing authority, the taxing authority shall not be required to make an additional adjustment to its rate or rates due to such payment once the deadline for setting its rates, as provided by this chapter, has passed in a taxable year, but shall adjust its rate or rates due to such payment in the next rate setting cycle to offset the payment in the next taxable year. For the purposes of this section, the term "business personal property", means tangible personal property which is used in a trade of business or used for production of income and which has a determinable life of longer than one year except that supplies used by a business shall also be considered business personal property, but shall not include livestock, farm machinery, property subject to the motor vehicle registration provisions of chapter 301, RSMo, property subject to the tables provided in section 137.078, or property assessed by the state tax commission under chapters 151, 153, and 155, RSMo, section 137.022, and sections 137.1000 to 137.1030.

            137.122. 1. As used in this section, the following terms mean:

            (1) "Business personal property", tangible personal property which is used in a trade of business or used for production of income and which has a determinable life of longer than one year except that supplies used by a business shall also be considered business personal property, but shall not include livestock, farm machinery, grain and other agricultural crops in an unmanufactured condition, property subject to the motor vehicle registration provisions of chapter 301, RSMo, property assessed under section 137.078, or property assessed by the state tax commission under chapters 151, 153, and 155, RSMo, section 137.022, and sections 137.1000 to 137.1030;

            (2) "Class life", the class life of property as set out in the federal Modified Accelerated Cost Recovery System life tables or their successors under the Internal Revenue Code as amended;

            (3) "Economic or functional obsolescence", a loss in value of personal property above and beyond physical deterioration and age of the property. Such loss may be the result of economic or functional obsolescence or both;

            (4) "Original cost", the price the current owner, the taxpayer, paid for the item without freight, installation, or sales or use tax. In the case of acquisition of items of personal property as part of an acquisition of an entity, the original cost shall be the historical cost of those assets remaining in place and in use and the placed in service date shall be the date of acquisition by the entity being acquired;

            (5) "Placed in service", property is placed in service when it is ready and available for a specific use, whether in a business activity, an income-producing activity, a tax-exempt activity, or a personal activity. Even if the property is not being used, the property is in service when it is ready and available for its specific use;

            (6) "Recovery period", the period over which the original cost of depreciable tangible personal property shall be depreciated for property tax purposes and shall be the same as the recovery period allowed for such property under the Internal Revenue Code.

            2. To establish uniformity in the assessment of depreciable tangible personal property, each assessor shall use the standardized schedule of depreciation in this section to determine the assessed valuation of depreciable tangible personal property for the purpose of estimating the value of such property subject to taxation under this chapter.

            3. For purposes of this section, and to estimate the value of depreciable tangible personal property for mass appraisal purposes, each assessor shall value depreciable tangible personal property by applying the class life and recovery period to the original cost of the property according to the following depreciation schedule. The percentage shown for the first year shall be the percentage of the original cost used for January first of the year following the year of acquisition of the property, and the percentage shown for each succeeding year shall be the percentage of the original cost used for January first of the respective succeeding year as follows:

Year                                         Recovery Period in Years

                       3                      5                      7                  10                 15                 20

 1                 75.00               85.00               89.29            92.50            95.00            96.25

 2                 37.50               59.50               70.16            78.62            85.50            89.03

 3                 12.50               41.65               55.13            66.83            76.95            82.35

 4                  5.00                24.99               42.88            56.81            69.25            76.18

 5                                         10.00               30.63            48.07            62.32            70.46

 6                                                                 18.38            39.33            56.09            65.18

 7                                                                 10.00            30.59            50.19            60.29

 8                                                                                      21.85            44.29            55.77

 9                                                                                      15.00            38.38            51.31

10                                                                                                         32.48            46.85

11                                                                                                         26.57            42.38

12                                                                                                         20.67            37.92

13                                                                                                         15.00            33.46

14                                                                                                                              29.00

15                                                                                                                              24.54

16                                                                                                                              20.08

17                                                                                                                              20.00

 

Depreciable tangible personal property in all recovery periods shall continue in subsequent years to have the depreciation factor last listed in the appropriate column so long as it is owned or held by the taxpayer. The state tax commission shall study and analyze the values established by this method of assessment and in every odd-numbered year make recommendations to the joint committee on tax policy pertaining to any changes in this methodology, if any, that are warranted.

            4. Such estimate of value determined under this section shall be presumed to be correct for the purpose of determining the true value in money of the depreciable tangible personal property, but such estimation may be disproved by substantial and persuasive evidence of the true value in money under any method determined by the state tax commission to be correct, including, but not limited to, an appraisal of the tangible personal property specifically utilizing generally accepted appraisal techniques, and contained in a narrative appraisal report in accordance with the Uniform Standards of Professional Appraisal Practice or by proof of economic or functional obsolescence or evidence of excessive physical deterioration. For purposes of appeal of the provisions of this section, the salvage or scrap value of depreciable tangible personal property may only be considered if the property is not in use as of the assessment date.

            5. This section shall not apply to business personal property placed in service before January 2, 2006.