HB 1892

SECOND REGULAR SESSION
  HOUSE COMMITTEE SUBSTITUTE FOR
  HOUSE BILL NO. 1892
  103RD GENERAL ASSEMBLY
5059H.02C  JOSEPH ENGLER, Chief Clerk
  AN ACT
To repeal section 137.122, RSMo, and to enact in lieu thereof one new section relating to
  property taxes.
Be it enacted by the General Assembly of the state of Missouri, as follows:
  Section A. Section 137.122, RSMo, is repealed and one new section enacted in lieu
2 thereof, to be known as section 137.122, to read as follows:
  137.122. 1. As used in this section, the following terms mean:
2(1) "Business personal property", tangible personal property which is used in a trade
3 or business or used for production of income and which has a determinable life of longer than
4 one year except that supplies used by a business shall also be considered business personal
5 property, but shall not include livestock, farm machinery, grain and other agricultural crops in
6 an unmanufactured condition, property subject to the motor vehicle registration provisions of
7 chapter 301, property assessed under section 137.078, the property of rural electric
8 cooperatives under chapter 394, or property assessed by the state tax commission under
9 chapters 151, 153, and 155, section 137.022, and sections 137.1000 to 137.1030;
10(2) "Class life", the class life of property as set out in the federal Modified
11 Accelerated Cost Recovery System life tables or their successors under the Internal Revenue
12 Code as amended;
13(3) "Economic or functional obsolescence", a loss in value of personal property above
14 and beyond physical deterioration and age of the property. Such loss may be the result of
15 economic or functional obsolescence or both;
16(4) "Original cost", the price the current owner, the taxpayer, paid for the item without
17 freight, installation, or sales or use tax. In the case of acquisition of items of personal
18 property as part of an acquisition of an entity, the original cost shall be the historical cost of
EXPLANATION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is
intended to be omitted from the law. Matter in bold-face type in the above bill is proposed language.
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19 those assets remaining in place and in use and the placed-in-service date shall be the date of
20 acquisition by the entity being acquired;
21(5) "Placed in service", property is placed in service when it is ready and available for
22 a specific use, whether in a business activity, an income-producing activity, a tax-exempt
23 activity, or a personal activity. Even if the property is not being used, the property is in
24 service when it is ready and available for its specific use;
25(6) "Recovery period", the period over which the original cost of depreciable tangible
26 personal property shall be depreciated for property tax purposes and shall be the same as the
27 recovery period allowed for such property under the Internal Revenue Code.
282. To establish uniformity in the assessment of depreciable tangible personal property,
29 each assessor shall use the standardized schedule of depreciation in this section to determine
30 the assessed valuation of depreciable tangible personal property for the purpose of estimating
31 the value of such property subject to taxation under this chapter.
323. For purposes of this section, and to estimate the value of depreciable tangible
33 personal property for mass appraisal purposes, each assessor shall value depreciable tangible
34 personal property by applying the class life and recovery period to the original cost of the
35 property according to the following depreciation schedule. The percentage shown for the first
36 year shall be the percentage of the original cost used for January first of the year following the
37 year of acquisition of the property, and the percentage shown for each succeeding year shall
38 be the percentage of the original cost used for January first of the respective succeeding year
39 as follows:
40Year  Recovery Period in Years
413  5        7        10        15  20
421  75.00      85.00    89.29     92.50     95.00  96.25
432  37.50      59.50    70.16     78.62     85.50  89.03
443  12.50      41.65    55.13     66.83     76.95  82.35
454  5.00      24.99    42.88     56.81     69.25  76.18
465  10.00    30.63     48.07     62.32  70.46
476  18.38     39.33     56.09  65.18
487  10.00     30.59     50.19  60.29
498  21.85     44.29  55.77
509  15.00     38.38  51.31
5110  32.48  46.85
5211  26.57  42.38
5312  20.67  37.92
5413  15.00  33.46
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5514  29.00
5615  24.54
5716  20.08
5817  20.00
59
60 Depreciable tangible personal property in all recovery periods shall continue in subsequent
61 years to have the depreciation factor last listed in the appropriate column so long as it is
62 owned or held by the taxpayer. The state tax commission shall study and analyze the values
63 established by this method of assessment and in every odd-numbered year make
64 recommendations to the joint committee on tax policy pertaining to any changes in this
65 methodology, if any, that are warranted.
664. Such estimate of value determined under this section shall be presumed to be
67 correct for the purpose of determining the true value in money of the depreciable tangible
68 personal property, but such estimation may be disproved by a taxpayer by substantial and
69 persuasive evidence of the true value in money under any method determined by the state tax
70 commission to be correct, including, but not limited to, an appraisal of the tangible personal
71 property specifically utilizing generally accepted appraisal techniques, and contained in a
72 narrative appraisal report in accordance with the Uniform Standards of Professional Appraisal
73 Practice or by proof of economic or functional obsolescence or evidence of excessive
74 physical deterioration. For purposes of appeal of the provisions of this section, the salvage or
75 scrap value of depreciable tangible personal property may only be considered if the property
76 is not in use as of the assessment date.
775. This section shall not apply to business personal property placed in service before
78 January 2, 2006. Nothing in this section shall create a presumption as to the proper method of
79 determining the assessed valuation of business personal property placed in service before
80 January 2, 2006.
816. The provisions of this section are not intended to modify the definition of tangible
82 personal property as defined in section 137.010.
837. (1) Beginning January 1, 2027, this section shall apply to all real property,
84 placed in service at any time, that is stationary property used for transportation or
85 storage of liquid and gaseous products, including water, sewage, and natural gas that is
86 not propane or LP gas, but not including petroleum products.
87(2) To estimate the value of the real property described in this subsection, each
88 assessor shall value such property by applying a twenty-year recovery period to the
89 original cost of the property according to the twenty-year depreciation schedule set
90 forth in subsection 3 of this section. Notwithstanding subsection 5 of this section, the
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91 presumption as to the proper method of determining the assessed value of such property
92 shall apply regardless of when such property was placed in service.
93(3) Each taxpayer owning real property described in this subsection shall
94 provide to an assessor, on or before May first of the applicable tax year, the original cost
95 and year placed in service of such property summarized in a format that is substantially
96 similar to the twenty-year real property reporting and valuation forms contained in
97 section 7.4 of the state tax commission assessor manual, revision date March 4, 2025, or
98 any other revision adopted by the state tax commission thereafter. Upon the written
99 request of the assessor, such information shall be provided for each taxing district
100 within the assessor's jurisdiction. If requested by the taxpayer, the assessor shall
101 provide to the taxpayer geographic information system maps in readable layers on
102 which a taxpayer may provide the information in this subsection. The taxpayer shall
103 certify under penalty of perjury that the information provided to the assessor under this
104 subsection is accurate to the best of the taxpayer's knowledge. All information provided
105 to an assessor under this subsection shall be considered proprietary information and
106 shall be accessible only to the assessor and the assessor's staff for internal use only.
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