Busy Week for Tax Changes in Missouri Capitol
Two bills containing tax priorities of Associated Industries of Missouri received approval of the Senate, while another was heard in a House of Representatives committee this week.
Senate Ways and Means Committee Chairman Will Kraus (R-Raytown) combined AIM’s top legislative priority, the “Broad-Based Tax Relief Act,” and two other bills into a $1.1 billion tax cut for Missouri taxpayers.
“Associated Industries appreciates the hard work of Senator Eric Schmitt and Senator Kraus to relieve some of the tax burden on Missouri employers,” said Ray McCarty, president of AIM. “This bill represents the best kind of economic development because it lowers taxes for every current and future Missouri employer.”
The Senate Ways and Means Committee combined several bills into SCS SB’s 26, 11 and 31. We continue to work with the sponsor on the details of the package. As passed by the committee, the bill would reduce corporation income taxes by 1.5 percent beginning with the 2014 tax year. S corporations, partnerships, LLC’s, sole proprietors, and other business entities in which the tax liability flows through to the owners, partners or shareholders, would be entitled to a “business income deduction” of 10 percent beginning in 2014, 20 percent in 2015, 30 percent in 2016, 40 percent in 2017, and 50 percent in 2018 and future tax years. In addition, the rate paid on taxes reported on individual income tax returns (including these types of business entities) would be reduced by 1.5 percent to 4.5 percent and the proposal would apply that tax rate to all income over $6,000. Currently, individual income taxpayers must pay six percent on all amounts above $9,000.
In addition to the $1.1 billion tax cut, AIM has two priorities within another tax bill that received Senate approval this week. Senate Bill 120, also sponsored by Senator Schmitt, contains reforms of several tax credit programs and adds two new priority incentive programs.
“Senate Bill 120 contains two priorities for Associated Industries of Missouri,” said McCarty. “The data storage center provisions will help Missouri attract high paying jobs in data processing. And, incentives for freight forwarders that use airports owned and operated by a Missouri city would encourage logistics professionals to use Missouri airports when exporting goods.”
Lastly, McCarty spoke in favor of legislation similar to SB 11 in the House International Trade Committee. The committee met Wednesday to hear House Bill 253, filed by Rep. T.J. Berry (R-Kearney). Several witnesses from the Clay County Economic Development Council testified in favor of the bill, including Executive Director Jim Hampton, Board member Pete Hall of the Curry Companies and Joe Roetheli, CEO of Key Companies and Associates, LLC. All witnesses talked about the importance of making Missouri competitive in the struggle to retain and grow Missouri employers, especially in light of recent tax reductions in Kansas and other states. Rep. Berry’s bill is gaining support. In fact, the bill has more than 30 co-sponsors, including House leadership.
“I hope to help the businesses of Missouri thrive and progress,” said Berry. “When companies grow, employment will grow. Having good paying jobs is what the people of Missouri are seeking.”