Two bills that could mean millions of dollars in savings to Missouri employers were presented by Sen. Wayne Wallingford to the Missouri Senate Ways and Means on Thursday. Missouri Chamber Vice President of Governmental Affairs Tracy King testified in support of both measures.
Senate Bill 461 is being called the “Made in Missouri Act,” because it would help businesses that manufacture products in Missouri for sales outside of the state keep more of their taxes. Currently, Missouri tax policy can be a disincentive for manufacturers that have sales out of state.
SB 461 gives Missouri manufacturers a new option for filing income tax. Since 1973, Missouri has had a single sales apportionment factor that taxes Missouri businesses on products manufactured in or distributed from Missouri but sold in other states. Apportionment formulas are important features of state corporate income taxes. They determine how much of a business’s income is taxable and affect the rate and competitiveness of the tax. Utilizing single sales apportionment factor creates an economic development incentive for companies to invest in Missouri property or to hire more people to sell products outside of Missouri.
“The Missouri Chamber supports allowing an alternative to file a pure single sales apportionment factor that does not punish Missouri based businesses for manufacturing products in or distributing products from this state when calculating their taxes. This option will make Missouri a more attractive location for new and expanding facilities, thereby creating jobs and growing our economy,” said King.
Sen. Wallingford also presented legislation that the Missouri Chamber has fought to pass for more than 20 years. Two decades ago, the Missouri Legislature passed, Senate Bill 380, the largest tax increase in Missouri history. In total, the legislation raised $380 million in taxes for education. A portion of the increase came by forcing Missouri corporations and many small businesses to pay state income taxes on part of federal income tax dollars that they had already paid. Just that portion of SB 380 now costs Missouri employers more than $500 million annually.
Senate Bill 407 would protect employers from having to pay income tax on federal taxes paid beginning in 2014.
“Currently, Missouri requires businesses to pay a tax on a tax,” argued King. “They are being forced to pay taxes on money they never see. It’s double taxation at its worst.”
Both bills received a hearing, but a vote was not taken by the committee on either bill.
For more information on tax issues, contact King at firstname.lastname@example.org, or by phone at 573-634-3511.