Authorizes a tax credit for certain charitable donations to local hospital foundations
Summary
HB364 repeals and replaces Missouri’s existing section 135.800 framework to create a new individual income tax credit for donations to qualifying local hospital foundations. Beginning with tax years on or after January 1, 2026, a Missouri income taxpayer who donates to a qualifying local hospital foundation may claim a credit equal to 50% of the donation amount, subject to a $2,500 annual cap per taxpayer and limited to the taxpayer’s state income tax liability. Taxpayers must file an affidavit with their return verifying the donation amount, and unused credits may be carried forward for up to three subsequent tax years.
The bill also defines “local hospital foundation” to mean a 501(c)(3) foundation that provides financial relief for unpaid hospital bills at not-for-profit hospitals for people in need in the taxpayer’s area, while also allowing donated funds to support related programs, equipment purchases, or other foundation purposes. The total statewide amount of credits is capped at $2 million per calendar year, with credits awarded on a first-come, first-served basis if claims exceed the cap. The credit is nonrefundable, nontransferable, and is classified as a domestic and social tax credit subject to Missouri’s Tax Credit Accountability Act, with rulemaking authority granted to the Department of Revenue and a six-year sunset unless reauthorized.
Impact
HB364 would add a new section 135.640 and amend section 135.800 to include the local hospital foundation charitable donation credit within Missouri’s domestic and social tax credit category. It would affect individual income taxpayers, local hospital foundations, and the Department of Revenue by creating new filing, verification, administration, and reporting requirements, while also making the credit subject to existing tax credit accountability and sunset provisions. The bill would not change withholding tax, and it limits the fiscal exposure through both per-taxpayer and statewide caps.
Sentiment
Based on the bill text and available context, the measure appears generally supportive of charitable giving and hospital-related community assistance, with no recorded committee transcript or vote history showing opposition or amendment debate. The structure of the credit, including caps, verification, and a sunset date, suggests an effort to balance support for donations with fiscal oversight. Overall sentiment appears favorable or at least neutral, with the bill framed as a targeted incentive rather than a broad tax reduction.
Contention
The main potential points of contention are fiscal cost and program design. Critics could focus on the $2 million annual statewide cap, the revenue impact of a 50% credit, and whether the credit primarily benefits taxpayers who already have the capacity to donate. There may also be questions about whether donations should be restricted to direct bill relief versus broader foundation uses, since the bill allows funds to support programs, equipment purchases, or other foundation purposes as determined by the foundation. Supporters would likely emphasize assistance for patients with unpaid hospital bills and the role of local hospital foundations in community health care access.