Sponsor says bill will ensure family trusts get same capital-gains treatment as individuals

Representative Bill Hardwick introduced House Bill 2945 to the Special Committee on Tax Reform, saying the measure is ‘‘cleanup language’’ intended to make sure capital gains realized by family trusts receive the same state tax treatment as gains realized by individuals after last year’s repeal of the state capital‑gains deduction. Hardwick said the bill treats trust‑realized gains that the IRS recognizes as capital gains as capital gains for Missouri tax purposes so families that use trusts are not placed at a tax disadvantage.

The bill’s sponsor framed the change as a standardization measure rather than a new tax preference: ‘‘We just don’t want you to be worse off tax wise if you create a trust,’’ Hardwick said, adding the intent is to make tax treatment ‘‘fair across the board.’’ He described common uses of family trusts — probate avoidance, estate structuring, liability protection — and said the bill would reflect federal categories where appropriate.

Committee members asked for more detail on which federal tax-code provisions the bill mirrors. One lawmaker pressed about Internal Revenue Code references discussed during the hearing and asked the sponsor to provide the specific IRC citations cited in committee (members raised IRC "sections 12.45 and 12.50" during questioning). Hardwick said he would supply the precise federal citations and provide the committee with the federal‑code list offline so members could confirm there were no anomalous inclusions.

Members also noted they had just received a fiscal note. A committee member summarized the fiscal estimate delivered that morning as ‘‘could exceed $48 million’’ in the first year and roughly ‘‘$33 million’’ thereafter; the sponsor and members said they needed additional time to review the Department of Revenue assumptions behind that estimate. Hardwick said he also had only recently received the fiscal note and recommended follow‑up questions about the assumptions used to produce those numbers.

The chair solicited proponents, opponents and informational witnesses and recorded none; the committee closed the hearing without taking a vote. The sponsor said he would provide federal‑code citations and any additional materials requested by the committee. The matter will return to committee for further consideration if members request follow‑up or an amendment.