Chapter 100

DED provides a state and local sales tax exemption on tangible personal property leased by the Company from the City/County. Most of the benefits derived from the use of Chapter 100 property and sales tax exemptions are derived from processes that occur at the local municipality level. Under Chapter 100 the facility, construction materials and certain tangible personal property may be purchased tax exempt by the City/County and then leased back to the Company. That tax exempt status extends to both state and local sales tax and local property tax. The City or County is using its own tax exempt status to extend to the purchase and ownership of certain real property, construction materials, and tangible personal property in order to provide a lower cost benefit to a business locating or expanding in its community. That benefit may be derived through an exemption of local property taxes and/or state and local sales taxes for an established period of time. DED’s function within the Chapter 100 process is to offer an exemption of the sales tax that would otherwise be applied to the “lease” of specific tangible personal property executed by the Municipality to the Company as part of their Chapter 100 project. The City/County tax exempt status does not cover state and local sales taxes that apply to the lease of certain tangible personal property back to the Company, which is the typical arrangement under the Chapter 100 process. (The lease of real property is not subject to sales tax.) The City’s/County’s authority for the exemption of certain sales taxes and property taxes rests in the purchase and ownership. Section 144.054, RSMo, of the state statute recognizes that additional state and local sales tax application to the tangible personal property leased back to the Company, and provides a further benefit opportunity to exempt the tax only with permission of DED. Guidance for Local Governments These state sales tax exemptions are approved based on the local economic development agency’s discretion and allow a community to compete for a business project against another state. This program would need to be combined with additional local incentives and the project would need to produce above-average wages with benefits. Cities and Counties may apply to DED on behalf of Companies for which Chapter 100 bond proceeds are used to purchase tangible personal property used in the process or production which is leased back to the Company. Eligible companies include: and development, agricultural processing and services in interstate commerce. Services in interstate commerce are defined with a very narrow definition. Retail and services in intrastate commerce are not eligible. Local Governments Eligibility requirements: Typical Steps in the process of receiving a DED Sales Tax Exemption Certificate for Sales Taxes applied to the lease of certain tangible personal property leased by a municipality to a company under a “Chapter 100” Project: The Municipality or their Economic Development Representative coordinates the incentive package to be proposed for a Company intending to expand or locate in the community and create new jobs directly with a DED Regional Business Development Specialist or Missouri Partnership Business Recruiter. The DED Regional Business Development Specialist or Missouri Partnership prepares an incentive proposal request containing the estimated benefit amount of the sales tax exemption on the lease of certain tangible personal property subject to the completion of the underlying Chapter 100 approvals at the local level. The Company accepts the DED proposal. The City/County passes an Inducement Resolution. The City/County AND Company submit the DED Chapter 100 Application with the following relevant attachments: Company must submit a list of proposed purchases of tangible personal property; City/County must submit a copy of the Inducement Resolution DED reviews the Application and determines approval.

Cities and Counties may apply to DED on behalf of Companies for which Chapter 100 bond proceeds are used to purchase tangible personal property used in the process or production which is leased back to the Company. Eligible companies include: and development, agricultural processing and services in interstate commerce. Services in interstate commerce are defined with a very narrow definition. Retail and services in intrastate commerce are not eligible. Local Governments Eligibility requirements: