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Department of Taxation and Finance

Survey of Railroad and Utility Taxation Practices Among the States: 2005 Update


1. Basis for taxation:

True value in money, which in practice is market value.

2. Property subject to taxation:

All real and personal property, both tangible and intangible. However, the State Tax Commission has declined to value intangible railroad/utility property. Exempt from taxation is inventory of various goods and supplies necessary for the operation of railroad and utility companies. At present no gross receipts taxation is levied on railroads and utilities.

3. Classification (if applicable):

Missouri has three general classes of property. Assessment level percentages are indicated in parentheses.

Class 1 - Real property, subdivided into the following subclasses:

1 -     Residential    (19)
2 -     Agricultural, horticultural    (12)
3 -     Utility, industrial, commercial,railroad, and all other property not included in subclasses 1 and 2    (32)

4. Level of government which determines basis for tax liability - ad valorem property tax:

Operating property- Missouri State Tax Commission.
Nonoperating property - County assessors.

5. Report filing and valuation method(s) required by statute for ad valorem taxation:

Railroad and utility companies are required to annually file all information necessary for the valuation of company property within Missouri. Companies are given a period of time to challenge values as determined by the State Tax Commission. These values are equalized and then sent to each respective city and county in the state.

Statutes do authorize unit valuation, but do not specify which valuation approaches to follow.

6. Practical application of valuation method(s):

In general the income approach is preferred in unit valuation, but this is subject to data availability and the nature of the utility being valued. Nonregulated utilities such as railroads are more amenable to the income approach, whereas the cost approach, especially original cost, is used on more regulated utilities. Stock and debt is not often used, since public trading is not frequent on these properties.

7. Valuation treatment of large facilities such as power plants, dams, or rail yards:

Such properties are included in the respective unit values.

8. Apportionment method(s) required by statute:

None by statute, but administrative rules are explicit. See #9 below.

9. Practical application or apportionment requirements:

Valuation of property allocated to Missouri is based on the following factors, with percentage weights assigned to them, barring lack of necessary data for allocation: 

Electric Companies Factor Percentage Weight
A. Gross Plant in service 30%
B. Net plant in service 30%
C. Total operating revenues 20%
D. Net Operating income 20%
Natural Gas Pipeline Companies Factor Percentage Weight
A. Gross Plant in service 45%
B. Net plant in service 45%
C. Miles of pipe (inch equivalent) 10%
Products and Liquid Pipeline Companies Factor Percentage Weight
A. Gross Plant in service 50%
B. Miles of pipe (inch equivalent) 10%
C. Barrel miles 30%
Telecommunications and Telephone Companies Factor Percentage Weight
A. Gross Plant in service 60%
B. Total operating revenues 20%
C. Net operating income 20%

10. Apportionment treatment of large facilities such as power plants, dams, or rail yards:

See above question #9.

11. Description of assessment appeals system:

Original assessment appeals are before the State Tax Commission of Missouri with further appeals to Circuit Court.

12. Status of deregulation/restructuring of electric generating and impact on valuation and apportionment methods used:

There has been no change to date. Restructuring was discussed, but no action was taken due to problems in California and other uncertainties.

13. State Government Staffing:

Staff consists of four employees (full-time equivalent basis)

Law Source(s):     Missouri Revised Statutes, Article X, Chs. 151 and 153
Rules: Title 12, Division 30, Chs. 1 and 2.

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