top of page
Search

"The Voice of Missouri Business®" Weekly Report January 20-24, 2025

Writer's picture: AIM TeamAIM Team

By: Ray McCarty, president/CEO, Associated Industries of Missouri


Photo by Tim Bommel, House Communications Photojournalist
Photo by Tim Bommel, House Communications Photojournalist

January 24, 2025 - The Missouri Legislative Session is now in full swing. Committees have been appointed and hearings have begun. In this series of weekly articles, we will inform you of some of the highlights of our activity on your behalf as we continue to serve as your voice in the Missouri Capitol. If you have questions or comments about any of these bills, please send them to Matthew Smith, AIM's Vice President of Government Affairs at msmith@aimo.com or to me at rmccarty@aimo.com and we will be happy to provide additional information. Let's get started!


Capital Gains Deduction (AIM supports)

Committees in both the House and Senate this week heard bills that would create a deduction of capital gains income for Missouri individuals and businesses. SB 46 (Trent) was heard in the Senate General Laws Committee, while HB 508 (Hruza) and HB 594 (Perkins) were heard in the House Commerce Committee. I testified in support of the bill in the Senate hearing and Matthew Smith testified in support of both bills in the House hearing which you may watch here. All three bills would remove a barrier to capital investment, including family businesses wanting to transfer ownership of the business before the owner's death. Many groups representing farmers also supported the bill. No action was taken on any of the bills this week, but there was no serious opposition and we anticipate movement on the bills in the coming weeks.


Class Action Reform (AIM supports)

The very first tort reform bill of the session was heard this week in the Senate General Laws Committee. SB 47 (Trent) aligns Missouri class action rules with federal class action rules regarding certification of a class. This is important to prevent defendant companies from needing to spend millions of dollars in some cases simply arguing about differences between the rules when a case is brought in state versus federal court. Opposition concerning a one word difference between the legislation and federal law was the only opposition expressed in the hearing - something the sponsor announced he would correct.


Corporation Income Tax Phaseout (AIM supports)

HB 425 (Vernetti) was heard in the House Special Committee on Tax Reform Wednesday. The bill would reduce the corporation income tax by 1% each year starting in 2026 until it is eliminated entirely. If eliminated entirely, tax credits would also be eliminated. The bill contains a problematic provision that would prevent the bill from benefiting financial institutions, but we are working to resolve that issue. AIM cautions that eliminating a tax we know (corporation income tax) may lead to enactment of a new type of tax that could be worse for business, as has happened in other states. If the bill progresses, we will work with the sponsor to address this issue.


Flat Rate Personal Income Tax (AIM supports)

HB 798 (Warwick) was also heard in the House Special Committee on Tax Reform. The bill would eliminate Missouri's graduated income tax rates and establish a flat rate at 4.7%. That rate would be reduced by .15% per year when general revenue for the current fiscal year is more than $175 million above the highest general revenue collections of the previous three fiscal years. There is no cap on the number of reductions. More than 90% of businesses pay their business income taxes on the owner, partner or member's individual income tax returns.


Pipeline Property Tax Depreciation and Future Test Year (AIM supports)

The Senate Commerce, Consumer Protection, Energy and the Environment Committee heard testimony on SB 4 and SB 5, both sponsored by the Committee Chairman Sen. Mike Cierpiot. Both bills contain two provisions supported by AIM.


Beginning in 2013, the State Tax Commission issued a form that was widely used by county assessors when assessing pipelines for natural gas, water and sewer across the state. The form indicated such pipelines should be depreciated on a 20-year depreciation schedule with a 20% residual value. This was a reasonable depreciation amount. Around the 2024 Christmas holiday, the State Tax Commission, without input from utilities, legislators, or the public, changed the form to depreciate the pipelines over 50 years with a 20% residual value. This would be an enormous tax increase (more than $22 million) on utility companies that, in turn, would be paid by the utility company's customers through higher rates. AIM has sent a request for information to the State Tax Commission to determine how this decision was made so rapidly and without any input from taxpayers or their representatives and we will report further when we receive a response to our request. Both bills would eliminate this tax increase on utility customers by placing the 20-year depreciation schedule in statute.


The bills would also allow utility companies to use a "future test year" rather than historical data. Ratepayers are protected because the bill allows the Public Service Commission to determine when the future test year should be used and requires the utility companies to adjust rates based on actual data at the end of the future test year. Using a future test year allows the utility to incorporate cost changes that are known for the upcoming year into the rate case in an effort to more efficiently and accurately recover costs of infrastructure improvements and costs of providing utility service.


Pesticide Labeling (AIM supports)

SB 14 (Justin Brown) would provide that federal pesticide labeling requirements would satisfy any warning label requirements. Some other states, including California, have attempted to impose their own labeling requirements. AIM was a party to a lawsuit in which we challenged the California law and won. We would like to stop this before it starts in Missouri.


We intend to provide these legislative updates to you on a weekly basis on Fridays as we track the progress of these and other bills affecting Missouri businesses.

25 views

Comments


© 2025 Associated Industries of Missouri, The Voice of Missouri Business ®

bottom of page