Associated Industries of Missouri Thursday issued a legislative alert to House members to reject the doubling of the tax credit fee as originally proposed in House Bill 2030 and as currently contained in Senate Amendment 1 to HCS HB 1729.
The Senate Governmental Accountability and Fiscal Oversight Committee Monday advanced HB 1729, a bill that would double the tax credit redemption fee from 2.5% to 5%. The fee is paid when certain tax credits are redeemed and are used to fund efforts to promote Missouri.
House members were put on alert because the legislation will return to the House for final passage.
Recently, taxpayers have found the Department of Economic Development has made the redemption of tax credits especially difficult. Also, the Department of Economic Development has slowed down issuance of some tax credits.
As a result, the amount of the fee has been reduced. The Department’s answer: double the tax credit fee. This is a typical answer from a government entity – taxes drop, increase the taxes.
“As we explained to the House Committee that considered this as a standalone bill, when a commission sales person determines their commission is not enough and they want to double their commission percentage, generally business owners would instead argue they need to sell more,” said Ray McCarty president of Associated Industries of Missouri. “Being a government agency, the Department’s answer is to increase the tax credit fee when they should be determining why they have issued fewer credits and addressing problems we know exist with the redemption of tax credits.”
Associated Industries of Missouri continues to oppose increasing the fee and instead suggests the Department of Economic Development fix the underlying problem, allowing taxpayers to redeem the credits to which they are entitled.
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