NAP Missouri State Income Tax Credits
Neighborhood Assistance Program
In 1978, Missouri became the third state in the nation to adopt legislation creating a Neighborhood Assistance Program (NAP). Since its inception, more than 11,000 donors have given over $210 million to NAP projects, and in return, the State has given over $110 million in tax credits to those donors.
The philosophy behind the program is quite simple. Rather than funding a project by giving a grant, the State "partially reimburses" eligible donors who fund the project themselves. In effect, this enables donors to finance local projects with money they would otherwise owe on their Missouri taxes.
HOW THE PROGRAM WORKS
Unlike a direct government grant, this form of state assistance involves no transfer of dollars. Instead,DCO assumes full responsibility for securing the desired financial support through their own fund-raising efforts, using the tax credits as an incentive. The State's role is to approve the projects and process tax credits for eligible donors. The credits equal 50% of the value of most contributions and are issued in the form of "coupons" that donors may then redeem when they file their Missouri tax return.
WHO QUALIFIES FOR CREDITS
- Corporations
- Insurance Companies
- Express Companies
- Banks and other financial institutions
- Partnerships (and their individual partners)
- S-corporations (and their individual shareholders)
- Limited Liability Companies (and their individual members)
- Individuals who either:
A) operate a sole proprietorship in Missouri
B) operate a farm in Missouri
C) have rental property
D) receive royalty or honorarium income
NAP CREDIT FEATURES
- Credits may be claimed against a variety of state taxes
A) Financial Institution Tax (special restriction may apply)
B) Corporate Franchise Tax
C) Corporate & Individual Income Taxes - Five-year carry-forward provision. Donor has six tax periods to utilize credits.
- May by combined with federal charitable deduction.
- Rules for valuing NAP donations are more favorable than IRS rules in some instances.
TYPES OF DONATIONS
DCO may accept cash, materials, supplies, equipment, real estate, stocks and bonds. The allocation of credits for donations is based on the fair market value of the item(s) at the time they are donated.
For more information, contact Marisa Declue at (417) 829-0896 or mdeclue@dcoonline.com.
