Senate Briefly Takes Up Business Tax Cut
April 5 – The Missouri Senate briefly took up SB 661, AIM’s Broad-Based Tax Relief Act of 2012, for debate yesterday afternoon.
The current version of SB 661 is NOT what Associated Industries of Missouri originally asked Senator Schmitt to file, because it only provides a 25% tax cut for small businesses while giving larger corporations a 50% tax cut. It is our understanding Senator Schmitt was trying to keep discussion moving on the bill. Senator Joe Keaveny (Democrat – 4) questioned how the tax cut would be funded. Senator Jason Crowell (Republican – 27) said he preferred to restore the federal income tax deduction that was taken away in 1993 rather than provide a tax cut for businesses, although he said he wanted to check with his accountant to see the real impact on small businesses.
The answer is that small businesses, such as S Corporations, LLC’s, LLP’s, etc., all benefit from the bill. The House version of the bill, HB 1639, sponsored by Rep. Jerry Nolte, is a 50% tax cut for EVERY business, including these types of businesses. The tax break is given to S Corporations and other flow-through entities through a deduction of business income, while the tax break for corporations is accomplished through a reduction in the corporation income tax rate.
We look forward to amendment of the Senate bill and further discussion as the session progresses.