Tax Credits Available

Key Information

Administered by the Missouri Department of Economic Development, the Neighborhood Assistance Program was created to assist endangered communities and their residents in the improvement of their quality of life. This program enables donors to redirect their Missouri tax dollars to local projects while reducing the administrative and overhead costs of state administration of the same program. Donors may claim the tax credits when they file their Missouri tax return. As an incentive, the tax credit not only maximizes the amount a donor might give, but also provides an opportunity for businesses, state government, and the nonprofit sector to build and sustain communities by establishing solid public-private partnerships.

NAP Tax Credit

The NAP tax credit is a one-time credit that may be allocated to an eligible donor (“Donor”) for up to 50 percent of the total value of an eligible donation. The credit may be carried forward for a period of 5 years. The credit may be applied dollar-for-dollar against liability for Missouri Individual Income tax, excluding withholding tax (for qualified individuals with business income); corporate franchise tax, Bank tax, Insurance Premium tax, Financial Institution tax, & Express Companies tax. The amount of the tax credit claimed shall not exceed the amount of the taxpayer’s liability in the tax year that the tax credit is claimed. Any portion of the tax credit not claimed by the taxpayer in the tax year the contribution was made may be carried over the next five succeeding tax periods. The total tax credits approved for a contributor shall not exceed $250,000 per tax year.

Eligible Donor

Businesses or Individuals who operate a sole proprietorship, operate a farm, have rental property or have royalty income are also eligible, as well as a shareholder in an S-corporation, a partner in a Partnership or a member of a Limited Liability Corporation. A detailed chart of eligible donors & related tax liabilities is shown below.

Features and Restrictions of the NAP Tax Credit

The NAP tax credit may be claimed against a variety of state tax liabilities and must be claimed in the following order:

• Gross Premium Receipts Tax
• Financial Institution Tax
• Corporate Franchise Tax
• Corporate and Individual Income Tax
• Gross Receipts Tax

Not refundable or transferable.

Five-year carry-forward provision. Donor has six tax periods in which to claim the tax credit. Any balance remaining after the sixth year is forfeited.

Eligible Donation

• Cash – valued at face amount of check
• Materials, supplies, equipment – valued at the lesser of either the fair market value or donor’s cost
• Professional services – valued at standard billing rate.
• Labor – valued at employee’s hourly wage plus fringes.
• Real Estate – valued at the lesser of two independent appraisals.
• Publicly-Traded Stocks and Bonds – Publicly-traded stocks are valued at stock market price on the date of transfer but must be sold by the nonprofit organization within one year from the date of contribution before tax credit will be approved for the donor. Bonds are valued at face value and must be matured at the time of donation. Bonds must be sold by the nonprofit organization within one year from the date of contribution before tax credits will be issued to the donor.