AIM’s Broad Based Tax Relief Act Advances
March 29 – On Wednesday, the House International Trade and Job Creation Committee, chaired by Representative Jerry Nolte, approved legislation that would dramatically reduce the tax burden of every employer in Missouri, provide a short amnesty period to allow delinquent taxpayers to “get straight” with the Department of Revenue, enhance collection of delinquent taxes, and make important minor adjustments to a sales/use tax exemption for companies that manufacture, mine, process, fabricate, or produce any product. CLICK HERE FOR THE TEXT OF THE BILL, HCS HB 1639.
The main part of the bill is the tax reduction for EVERY business in Missouri, regardless of size or organization type. This is AIM-drafted legislation that is the direct result of an idea inspired by one of our members, Bennett Packaging in Lee’s Summit. The bill would reduce the tax burden for every employer in Missouri by 10% the first year, 20% the second year, and so forth, until the taxes have been reduced by 50%. The reductions would only happen when income tax revenues exceed income tax revenues in 2010. “This bill will test the theory we all believe to be true,” said Associated Industries of Missouri President Ray McCarty,”that reducing the tax burden on employers will give them money to invest in hiring additional employees that will, in turn, raise the overall income tax collections for the state.” Each year the tax collections exceed 2010 levels, the tax rate on employers would be cut an additional 10% until the total amount has been reduced by 50%.
The bill will now advance to the House Rules Committee, then be eligible for debate by the full House of Representatives.
UPDATE: The Senate Jobs, Economic Development and Local Government Committee, chaired by Senator Eric Schmitt, also gave initial approval to a similar bill, SB 661, sponsored by Senator Schmitt. The Senate bill differs from the House version, in that it provides only a 25% tax cut to individuals that are reporting business income on their individual returns (such as S Corporations, partnerships, sole proprietorships, LLC’s, etc.) but provides a 50% tax cut for corporations in its current form. We have been working closely with Senator Schmitt to resolve this issue and his intent is definitely to provide an equal tax cut to all Missouri businesses, regardless of the type of business organization. We are pleased the bill has advanced and will keep you posted of progress.