285.230. Transient employers, defined, bonding requirements--exceptions--specific requirements--penalties--records to be kept, how--discontinuance in activity, notice to director of revenue.

MISSOURI STATUTES AND CODES

285.230. Transient employers, defined, bonding requirements--exceptions--specific requirements--penalties--records to be kept, how--discontinuance in activity, notice to director of revenue.

Transient employers, defined, bondingrequirements--exceptions--specificrequirements--penalties--records to be kept, how--discontinuancein activity, notice to director of revenue.

285.230. 1. As used in this section, "transient employer" means anemployer as defined in sections 143.191, RSMo, 287.030, RSMo, and 288.032,RSMo, making payment of wages taxable under chapters 143, 287, and 288,RSMo, who is not domiciled in this state and who temporarily transacts anybusiness within the state, but shall not include any employer who is notsubject to Missouri income tax because of the provisions of 15 U.S.C. 381.The transaction of business shall be considered temporary at any time itcannot be reasonably expected to continue for a period of twenty-fourconsecutive months. Professional athletic teams and professionalentertainers domiciled in a state other than Missouri shall be deemed a"transient employer" for the purposes of this section, unless the person orentity who pays compensation to the nonresident entertainer has fullycomplied with the provisions of section 143.183, RSMo, in which case thenonresident entertainer shall not be considered a transient employer.

2. Employers meeting the following criteria shall not be required tofile a financial assurance instrument as required by this section:

(1) The principal place of business of the employer must be in acounty of another state which is contiguous to the state of Missouri; and

(2) The employer must have been under contract to perform work inMissouri for at least sixty days cumulatively out of twelve months duringeach of the two calendar years immediately preceding the employer's initialapplication for exemption from the provisions of this section; and

(3) The employer must have in his possession a tax clearance from thedepartment of revenue and the division of employment security stating thatthe employer has faithfully complied with the tax laws of this state duringthe period set out in subdivision (2) of this subsection.

Within ninety days of August 13, 1988, such employers must obtain initialtax clearances in accordance with subdivision (3) of this subsection. Anytax clearance issued under the provisions of this section by the divisionof employment security shall be submitted to the department of revenue. Onor before January thirty-first of each year, except January thirty-firstfollowing the year during which the employer first meets these criteria,the employer shall submit application to the department of revenue anddivision of employment security for a renewed tax clearance. Failure tosubmit such renewal applications or failure to comply with applicableMissouri taxing and employment security laws during the period betweenannual renewal dates or removal of the employer's principal place ofbusiness from a county in another state which is contiguous to Missouri toa state other than Missouri shall immediately subject the employer to allprovisions of this section. An employer meeting the requirements of thissubsection shall still be subject to the provisions of subsection 5 of thissection.

3. Every transient employer shall file with the director of revenue afinancial assurance instrument including, but not limited to, a cash bond,a surety bond, or an irrevocable letter of credit as defined in section400.5-103, RSMo, issued by any state or federal financial institution. Thefinancial assurance instrument shall be in an amount not less than theaverage estimated quarterly withholding tax liability of the applicant, butin no case less than five thousand dollars nor more than twenty-fivethousand dollars. Any corporate surety shall be licensed to do suchbusiness in this state and approved by the director of revenue to act as asurety. The transient employer shall be the principal obligor and thestate of Missouri shall be the obligee. The financial assurance instrumentshall be conditioned upon the prompt filing of true reports and the paymentby such employer to the director of revenue of any and all withholdingtaxes which are now or which hereafter may be levied or imposed by thestate of Missouri, upon the employer, together with any and all penaltiesand interest thereon, and generally upon the faithful compliance with theprovisions of chapters 143, 287, and 288, RSMo.

4. Any transient employer who is already otherwise required to file afinancial assurance instrument as a condition of any contract, providedsaid financial assurance instrument guarantees payment of all applicablestate taxes and all withholding taxes levied or imposed by the state andprovided that such financial assurance instrument is delivered by certifiedmail to the department of revenue by the applicable awarding entity atleast fourteen days before the execution of the contract for theperformance of work, may use the same financial assurance instrument tocomply with the provisions of this section. Before such financialassurance instrument is approved by the awarding entity, the director ofrevenue shall be satisfied that such financial assurance instrument issufficient to cover all taxes imposed by this state and the director shallso notify the awarding entity of the decision within the fourteen daysprior to the execution of the contract. Failure to do so by the directorshall waive any right to disapprove such financial assurance instrument.Before a financial assurance instrument is released by the entity awardingthe contract, a tax clearance shall be obtained from the director ofrevenue that such transient employer has faithfully complied with all thetax laws of this state.

5. Every transient employer shall certify to the director of revenuethat such employer has sufficient workers' compensation insurance eitherthrough a self-insurance program or a policy of workers' compensationinsurance issued by an approved workers' compensation carrier. Theself-insurance program shall be approved by the division of workers'compensation pursuant to section 287.280, RSMo. The insurance policy shallbe in a contract form approved by the department of insurance, financialinstitutions and professional registration.

6. In the event that liability upon the financial assuranceinstrument thus filed by the transient employer shall be discharged orreduced, whether by judgment rendered, payment made or otherwise, or if inthe opinion of the director of revenue any surety on a bond theretoforegiven or financial institution shall have become unsatisfactory orunacceptable, then the director of revenue may require the employer to filea new financial assurance instrument in the same form and amount. If suchnew financial assurance instrument shall be furnished by such employer asabove provided, the director of revenue shall upon satisfaction of anyliability that has accrued, release the surety on the old bond or financialinstitution issuing the irrevocable letter of credit.

7. Any surety on any bond or financial institution issuing anirrevocable letter of credit furnished by any transient employer asprovided in this section shall be released and discharged from any and allliability to the state of Missouri accruing on such bond or irrevocableletter of credit after the expiration of sixty days from the date uponwhich such surety or financial institution shall have lodged with thedirector of revenue a written request to be released and discharged; butthe request shall not operate to relieve, release or discharge such suretyor financial institution from any liability already accrued or which shallaccrue during and before the expiration of said sixty-day period. Thedirector of revenue shall promptly on receipt of notice of such requestnotify the employer who furnished such bond or irrevocable letter of creditand such employer shall on or before the expiration of such sixty-dayperiod file with the director of revenue a new financial assuranceinstrument satisfactory to the director of revenue in the amount and formprovided in this section.

8. Notwithstanding the limitation as to the amount of any financialassurance instrument fixed by this section, if a transient employer becomesdelinquent in the payment of any tax or tenders a check in payment of taxwhich check is returned unpaid because of insufficient funds, the directormay demand an additional instrument of such employer in an amountnecessary, in the judgment of the director, to protect the revenue of thestate. The penal sum of the additional instrument and the instrumentfurnished under the provisions of the law requiring such instrument may notexceed two quarters' estimated tax liability.

9. For any period when a transient employer fails to meet therequirements of this section, there shall be added to any deficiencyassessed against a transient employer, in addition to any other addition,interest, and penalties, an amount equal to twenty-five percent of thedeficiency.

10. A taxpayer commits the crime of failure to file a financialassurance instrument if he knowingly fails to comply with the provisions ofthis section.

11. Failure to file a financial assurance instrument is a class Amisdemeanor. Pursuant to section 560.021, RSMo, a corporation found guiltyof failing to file a financial assurance instrument may be fined up to fivethousand dollars or any higher amount not exceeding twice the amount theemployer profited from the commission of the offense.

12. Failing to register with the department of revenue and executethe financial assurance instrument herein provided, prior to beginning theperformance of any contract, shall prohibit the employer from performing onsuch contract until he complies with such requirements.

13. Each employer shall keep full and accurate records clearlyindicating the names, occupations, and crafts, if applicable, of everyperson employed by him together with an accurate record of the number ofhours worked by each employee and the actual wages paid. The payrollrecords required to be so kept shall be open to inspection by anyauthorized representative of the department of revenue at any reasonabletime and as often as may be necessary and such records shall not bedestroyed or removed from the state for a period of one year following thecompletion of the contract in connection with which the records are made.

14. The entering into of any contract for the performance of work inthe state of Missouri by any such employer shall be deemed to constitute anappointment of the secretary of state as registered agent of such employerfor purposes of accepting service of any process, or of any notice ordemand required or permitted by law. The service of any such process,notice or demand, when served on the secretary of state shall have the samelegal force and validity as if served upon the employer personally withinthe state.

15. In addition, any employer who fails to file a financial assuranceinstrument as required by this section shall be prohibited from contractingfor or performing labor on any public works project in this state for aperiod of one year.

16. Whenever a transient employer ceases to engage in activity withinthe state it shall be the duty of such transient employer to notify thedirector of revenue in writing at least ten days prior to the time thediscontinuance takes effect.