General Assembly begins work on tax and regulation reforms

Three legislative committees have held hearings on bills to encourage business growth by lowering taxes and fighting excessive regulation.

The Missouri Chamber of Commerce and Industry was present during the hearings on the following bills, all of which are awaiting committee votes.

House Bill 513: Establishing the Lowest Business Filing Fees in the Nation

Rep. John McCaherty’s House Bill 513 would lower Missouri’s business filing fees to $5. If passed, this would give Missouri the lowest fees in the nation.

The bill is supported by Missouri Secretary of State Jason Kander, a Democrat. Kander’s office collects the business filing fees.

“There have been some changes over the last few years with the Secretary of State’s office. We’ve started doing more things online, started streamlining that process a little bit,” said Rep. McCaherty, a Republican from High Ridge. “So this is an opportunity for us to put about $6 million back into the hands of our small business owners.”

Tracy King, the Missouri Chamber vice president of governmental affairs, said the bill would give Missouri a positive distinction in the economic development community.

“This will actually give us an opportunity to say we are number one in the country in something and this is the right area to be number one in,” she said.

A similar bill in the Senate awaits a hearing in a Senate committee on Feb. 17. That bill is Senate Bill 157, sponsored by Sen. Wayne Wallingford, a Republican from Cape Girardeau.

House Bill 325: Bringing Jobs Home

What happens when a Missouri company decides to expand in another state or country, but then later realizes staying in Missouri would have been the better choice?

Rep. McCaherty’s Bring Jobs Home Act would create a new tax deduction to entice those companies to come back to Missouri.

“A lot of times when those decisions are made, they get to where they thought were greener pastures, they look around and they say, ‘This is not all it was cracked up to be and we’d like to come home…’ We would like to make Missouri an option,” Rep. McCaherty said.

The deduction would cover as much as 20 percent of a business’s expenses when they re-establishing in Missouri. Rep. McCaherty is proposing a $10 million annual cap on the deduction. It includes safeguards that require businesses to repay the deduction if they eliminate the business unit they brought to Missouri within 10 years of receiving the benefit. The deduction would also sunset in six years.

King said the bill would help attract jobs back to Missouri, including jobs that have been outsourced to other countries.

“We’re constantly competing with the eight surrounding states for jobs but we’re also competing globally,” King said. “This legislation would have a positive impact on our work to bring economic development to Missouri.”

House Bill 667: Empowering the Small Business Regulatory Fairness Board

Years ago, Missouri established a special board to help small business owners who feel that state regulations are unfairly burdening their companies. A proposal by Rep. Caleb Rowden, a Republican from Columbia, would reinvigorate the board and give it greater power to help businesses.

Rep. Rowden’s House Bill 667 would change the membership of the nine-member Small Business Regulatory Fairness Board, giving House and Senate leaders the power to appoint board members.

“You have a board that was put in place to help small businesses fight back and have an outlet to fight back against unfair regulation and yet the governor is not putting members on the board and it’s largely sat idle for a long period of time,” Rep. Rowden said.

Rep. Rowden is also proposing to create a new tax credit that the board can issue to small businesses that have been unfairly burdened by state regulations.

King said that she has attended meetings of the Small Business Regulatory Fairness Board and that she agrees that the group needs new direction.

“We have members who have severed on the board who have expressed frustration that the board doesn’t meet regularly and when they do meet they are not really doing the businesses they are charged to do,” King said. “We would like to see the board revitalized.”

Senate Bill 4: Making a Greater Impact with Tax Cuts

In 2014, the Missouri General Assembly passed the state’s first income tax reducing in nearly 100 years. This year, lawmakers are reviewing a proposal to double that tax cut.

The current law will see Missouri’s top income tax drop from 6 percent to 5.5 percent in .1 percent yearly increments during years when state revenue increases by at least $150 million. Sen. Eric Schmitt, a Republican from Glendale, is proposing to lower the tax rate to 5 percent over the same time period by dropping the rate by .2 percent each year using the same revenue growth trigger.

Sen. Schmitt’s Senate Bill 4 would also double the business income tax deduction passed in 2014, from 25 percent to 50 percent when fully phased in.

During a hearing, Sen. Schmitt said his bill would “continue the good work we did last year.”

He said reducing the income tax would encourage economic expansion and allow businesses to invest in growth.

“People deserve to keep more of their own money,” he said. “Businesses deserve to keep more of their own money to invest” in jobs and equipment.

King testified that the Missouri Chamber supports the effort to further reduce the tax burden in Missouri.

“We have a legislative policy that supports broad-based tax cuts,” King said. “This proposal would help Missouri businesses grow send a message outside our state that Missouri is serious about competing for jobs.”

House Bill 384: Encouraging Payment Without Penalty

Rep. Tom Flanigan, a Republican from Carthage, has proposed a bill allowing delinquent taxpayers in Missouri to be given amnesty on all penalties in exchange for paying the taxes they owe to the state.

Under Rep. Flanigan’s House Bill 384, a taxpayer would have to apply for amnesty and then pay their taxes in full between July 1, 2015, and Sept. 30, 2015.

For more information about tax and regulatory issues, contact King at tking@mochamber.com or by phone at 573-634-3511.

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About mochamber

The Missouri Chamber of Commerce and Industry understands that the quality of life in our state depends on quality jobs for Missourians. To that end, we have one simple mission: to protect and advance Missouri business.

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