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SB 1790

SB 1790 - This act effectively reduces the tax rate paid by all existing property owners when a data center is built by creating a mandatory rate reduction mechanism. JOSH NORBERG

2026 Regular Session

Missouri SB 1790 would tie property tax rate changes to reassessments and data-center growth, using rate reductions to offset new data-center valuations while preserving overall re

Second Read and Referred S Select Committee on Property Taxes and the State Tax Commission Committee
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Bill Summary · SB 1790

Summary of SB 1790 (Missouri, 2026)

Purpose and intent

  • The bill proposes a comprehensive reform of how property tax levies are calculated and adjusted in Missouri.
  • A central feature is to reduce property tax levies when data centers are built, by implementing a rate reduction mechanism tied to data center valuation and presence.
  • Overall design aims to ensure tax revenue continues to be produced while allowing automatic adjustments to tax rates based on reassessments, valuation changes, and construction activity, with explicit treatment of data center property.

Key provisions and changes

  • Section 137.073 establishes a new framework for calculating property tax levies, including:

    • Definitions:
    • Data center: A facility or group of facilities ≥ 10,000 square feet used for enterprise data processing, cloud computing, hosting, etc.
    • Data center property: All real and personal property used in operating a data center.
    • Tax rate ceilings and revenues:
    • Introduces a mechanism to revise tax rates (levies) to produce substantially the same tax revenue as prior year, while respecting ceilings and voter-approved constraints.
    • Requires consideration of inflation growth (CPI) and prior voter-approved rates, with bounds on rate changes.
    • Reassessment and rate adjustments:
    • Upon changes in assessed valuation (including subclasses of real property or aggregate personal property), political subdivisions must revise levy rates to maintain roughly the same total tax revenue for each subclass or class, subject to caps and prior approvals.
    • Allows limited inflationary growth in line with constitutional constraints, but not exceeding CPI or 5% (whichever is lower) for adjustments.
    • Data center exclusion from new-construction/improvements:
    • The value of new construction and improvements normally added to assessed value must exclude data center property. Instead, the data center’s valuation is treated as existing property for purposes of calculating rate reductions.
    • When a data center is constructed or personal property is placed in service, its value is included in the total assessed valuation used to determine required rate reductions (i.e., its growth contributes to revenue-neutral adjustments), but it is not treated as “new construction” for the purpose of excluding from new-construction calculations.
    • Data center valuation treatment:
    • Data center property (both real and personal) is to be treated as existing property for rate-revision calculations, ensuring its valuation participates in determining tax-rate reductions.
    • Certification and data reporting:
    • Assessor and state tax commission duties include certifying new construction, growth, and CPI data to aid rate calculations.
    • Requires county clerks to forward data on rate ceilings and proposed rates to the state auditor for compliance review.

  • Section 137.073 subsections address:

    • Notification and adjustment of rates when assessed valuations change.
    • Rules for school districts and other political subdivisions to adjust ceilings and rates.
    • Procedures for public hearings and adoption when rate increases are contemplated, especially after reassessment years.
    • The ability for taxpayers to challenge rates, including class-action provisions for taxpayers within a taxing authority.

  • Section 137.073 details on:

    • Tax rate calculation methodology: blended rates for school districts, with proportional distribution of state railroad/utility revenue by subclass.
    • Rounding rules for tax rate proposals and required substantiation data to be provided to the state auditor.
    • Auditor oversight: the State Auditor reviews rate ceilings and proposed rates; incorrect filings can trigger adjustments or legal action.

Who would be affected

  • Property owners across Missouri:
    • All real and personal property owners would experience rate adjustments based on reassessment activity and the revised framework.
    • Data center occupants and developers could influence rate reductions via their construction and valuation activity, affecting neighboring properties through the rate-reduction mechanism.
  • Local taxing authorities (counties, cities, school districts):
    • Required to revise tax rates to align with the new framework, subject to voter approvals and constitutional constraints.
    • Must provide data and work with the State Auditor to ensure compliance.
  • Data centers:
    • Specifically defined and treated to ensure their valuations contribute to rate reductions as part of the overall revenue-neutral calculation, while not being counted as “new construction” for rate-exclusion purposes.

Procedural and timeline aspects

  • Structure:
    • The bill would repeal and replace Section 137.073 with a new framework for calculating property tax levies.
  • Oversight and compliance:
    • County clerks, assessors, school districts, and other taxing authorities would be required to implement the rate-revision process annually, considering CPI data, reassessment changes, and data-center valuations.
    • The State Auditor would review rate ceilings and proposed rates for compliance.
  • Public participation:
    • The bill requires public hearings and formal adoption processes when rate increases are proposed in certain contexts, particularly after reassessment years.
  • Enforcement and remedies:
    • The bill provides mechanisms for enforcement, including potential injunctive relief through the Attorney General if authorities fail to revise rates properly and refunds for taxpayers paying inaccurately levied taxes.

Potential impacts to monitor

  • The rate-reduction mechanism could lower effective property tax burdens for current owners when data centers are built, depending on reassessment dynamics and CPI.
  • Local revenue stability hinges on the balance between rate reductions and maintaining adequate funding for schools and local services.
  • Administrative complexity and compliance burden would increase for counties, school districts, and other taxing authorities due to the detailed reporting, auditing, and rate calculations required.
  • Data-center growth would have a measurable influence on tax-rate calculations, potentially altering distribution of tax obligations across property classes.

Note: The text provided is the bill language as introduced. If enacted, the bill would be subject to amendments, and final language may differ.

Compiled from official sources — confirm details with the bill’s official record.

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