166.435. State tax exemption.

MISSOURI STATUTES AND CODES

State tax exemption.

166.435. 1. Notwithstanding any law to the contrary, the assets ofthe savings program held by the board, the assets of any deposit programauthorized in section 166.500, and the assets of any qualified tuitionsavings program established pursuant to Section 529 of the Internal RevenueCode and any income therefrom shall be exempt from all taxation by thestate or any of its political subdivisions. Income earned or received fromthe savings program, deposit, or other qualified tuition savings programsestablished under Section 529 of the Internal Revenue Code program shallnot be subject to state income tax imposed pursuant to chapter 143, RSMo,and shall be eligible for any benefits provided in accordance with Section529 of the Internal Revenue Code. The exemption from taxation pursuant tothis section shall apply only to assets and income maintained, accrued, orexpended pursuant to the requirements of the savings program establishedpursuant to sections 166.400 to 166.455, the deposit program establishedpursuant to sections 166.500 to 166.529, and other qualified tuitionsavings programs established under Section 529 of the Internal RevenueCode, and no exemption shall apply to assets and income expended for anyother purposes. Annual contributions made to the savings program held bythe board, the deposit program, and any qualified tuition savings programestablished under Section 529 of the Internal Revenue Code up to andincluding eight thousand dollars per participating taxpayer, and up tosixteen thousand dollars for married individuals filing a joint tax return,shall be subtracted in determining Missouri adjusted gross income pursuantto section 143.121, RSMo.

2. If any deductible contributions to or earnings from any suchprogram referred to in this section are distributed and not used to payqualified higher education expenses or are not held for the minimum lengthof time established by the appropriate Missouri board, the amount sodistributed shall be added to the Missouri adjusted gross income of theparticipant, or, if the participant is not living, the beneficiary.

3. The provisions of this section shall apply to tax years beginningon or after January 1, 2008, and the provisions of this section with regardto sections 166.500 to 166.529 shall apply to tax years beginning on orafter January 1, 2004.