Mo. Code Regs. tit. 15 § 50-5.030

Current through Register Vol. 49, No. 24, December 16, 2024

Section 15 CSR 50-5.030 - Tax Credit Program

PURPOSE: This rule establishes procedures for administration of the Missouri Empowerment Scholarship Accounts Program (the program) tax credits to enable taxpayers to make private, voluntary contributions to educational assistance organizations in order to promote improvement of the quality of education in this state, and specifies responsibilities of the treasurer and educational assistance organizations in administering and monitoring the tax credits.

(1) Definitions.

(A) Existing Missouri Definitions. The following terms, as used in this rule, are defined in section 135.712, RSMo: educational assistance organization, parent, program, scholarship account, taxpayer. The following terms, as used in this rule, are defined in section 166.700, RSMo: curriculum, district, private school, qualified school, qualified student. The following term, as used in this rule, is defined in section 135.715, RSMo: qualifying contribution.

(B) Additional Definitions. The following definitions shall also apply to the following terms as they are used in this rule:

1. "501(c)(3) organization" means an organization described in section 501(c)(3) of the Internal Revenue Code and exempt from taxation under section 501(a) of the Internal Revenue Code;

2. "Annual inflation adjusted cap" means the cumulative amount of tax credits that may be allocated to all taxpayers in any one (1) calendar year after the annual tax credit amount is annually adjusted by the treasurer on December 1, to be effective January 1 of the next calendar year, for inflation based on the consumer price index for all urban consumers for the Midwest region, as defined and officially recorded by the United States Department of Labor or its successor, such annual increase shall cease when the amount of tax credits reach fifty million dollars;

3. "Annual tax credit amount" means, for any state fiscal year, the sum of the amount of tax credits approved under section 33.282.3, RSMo, which are approved for a taxpayer whose taxable year begins on or after January 1 of the calendar year preceding the start of the applicable state fiscal year;

4. "Annual total grant amount" means, for any school year the sum of the amount of scholarship account payments distributed to the account of a qualified student, not to exceed a total amount equal to the state adequacy target;

5. "Household income" has the same meaning as the term "income" as defined in the income eligibility guidelines for free and reduced price meals under the National School Lunch Program in 7 CFR part 210 as published in the Federal Register by the United States Department of Agriculture;

6. "Owner or operator" includes:

A. A president, officer, or director of an educational assistance organization or a person with equivalent decision-making authority over an educational assistance organization; and

B. An owner, operator, superintendent, or principal of an eligible qualified school or a person with equivalent decision-making authority over an eligible qualified school;

7. "State adequacy target" has the same meaning as defined in section 163.011, RSMo, and calculated by the Department of Elementary and Secondary Education; and

8. "Taxpayer" means any taxpayer as defined in section 135.712.2(7), RSMo, who applies to make a qualifying contribution to a certified educational assistance organization and reserve a tax credit for such contribution.

(2) Annual Adjustments. Beginning December 1, 2022, the treasurer shall adjust the cumulative amount of tax credits that may be allocated to all taxpayers in any one (1) calendar year based on the most recently released consumer price index for all urban consumers for the Midwest region, as defined and officially recorded by the United States Department of Labor or its successor. The adjustment shall occur annually on December 1 and all such annual adjustments shall be effective January 1 of the next calendar year. Such annual adjustments shall cease when the amount of tax credits reaches fifty (50) million dollars annually.

(3) Allocation of Tax Credits.

(A) Initial Allocation. For tax year 2022, an educational assistance organization shall request an initial allocation of tax credits as part of the application for certification to participate in the program. For all subsequent tax years, an educational assistance organization shall request an initial allocation of tax credits by the December 1 prior to the applicable tax year. The treasurer shall review the requests and provide initial allocations by January 1 of the applicable tax year.

(B) Reallocation. From January 1 to December 31 of a calendar year, the treasurer may reallocate any amounts made available that are not obligated or expended, as determined by the treasurer.

(4) Application Process. Beginning July 1, 2022, and January 1 every year thereafter, a taxpayer may apply for a tax credit by visiting the treasurer's official website and completing the online application for tax credit allocation for contributions to an educational assistance organization.

(A) Application for Tax Credit Reservation.

1. Application. The online application shall require a taxpayer to provide the following:

A. The taxpayer's name, address, and Social Security number or individual taxpayer identification number;

B. The name of the certified educational assistance organization to which the taxpayer intends to contribute; and

C. The amount the taxpayer intends to contribute.

D. Any other information required by the treasurer.

2. Confirmation. Once this application is completed, a taxpayer shall receive an application confirmation that can be printed. The application confirmation only confirms an application for reservation of tax credits; it does not authorize the issuance or use of a tax credit.

3. Donation. The taxpayer shall present the application confirmation and specified contribution to the educational assistance organization designated on the application.

4. Time Limits. A taxpayer has thirty (30) business days after receipt of an application confirmation to make the qualifying contribution to the designated educational assistance organization. After thirty (30) business days, the application expires.

5. Application Review. The educational assistance organization shall submit to the treasurer documentation verifying each qualifying contribution received including the application confirmation and proof of the transfer of funds. The treasurer shall review the application and supporting documentation and if the taxpayer is eligible, shall approve the request on a first come, first served basis.

6. Approval. The treasurer shall send the educational assistance organization a written receipt (tax credit certificate) evidencing the tax credit has been approved. If an application is not approved, the treasurer shall send a written notice that sets forth the reason the tax credit allocation application could not be approved. The educational assistance organization shall provide the receipt to the taxpayer.

(B) Request for Rescission. A taxpayer may apply to the treasurer to rescind all or part of a tax credit allocation for a contribution to certified educational assistance organization. A taxpayer shall submit a separate application for each tax credit allocation they request to rescind.

1. Rescission Application. An application for rescission of a previously granted tax credit allocation shall include the following:

A. The confirmation number from the original application for an allocation of tax credit;

B. The amount the taxpayer requests to rescind in total;

C. The individual taxpayer identification number or Social Security number associated with the original application;

D. The name of the educational assistance organization to which the taxpayer originally intended to make their contribution;

E. Whether the contribution was made to the educational assistance organization; and

F. Any other information required by the treasurer.

2. Confirmation Receipt. Once this application for rescission is completed, a taxpayer shall receive a confirmation. The confirmation only confirms the treasurer received the application, it does not approve the application for rescission of a previously approved tax credit allocation.

3. Application Review. The treasurer shall review the application for rescission and if the taxpayer is eligible shall approve the request on a first come, first served basis.

4. Approval. The treasurer will send written correspondence explaining the approved rescinded amount or the reason the application could not be approved. The treasurer will approve the application unless the taxpayer has claimed the credit amount to be rescinded on a previously filed tax return, the credit allocation period for a particular calendar year is closed, or the contribution has already been designated by the educational assistance organization to fund a scholarship account. No requests for rescission shall be made or considered after November 1.

(5) Severability. If any provision of this rule, or the application of it to any person or circumstance, is determined to be invalid by a court of competent jurisdiction, such invalidity shall not affect other provisions of this rule which can be given effect without the invalid provision or application, and to that end, the provisions of this rule are severable.

15 CSR 50-5.030

Adopted by Missouri Register May 16, 2022/Volume 47, Number 10, effective 4/25/2022

Amended by Missouri Register June 15, 2022/Volume 47, Number 12, effective 7/31/2022