Hall Family Foundation study shows Missouri has lost $217 million in taxes in border war

Legislation that would end tax incentives for businesses that cross state lines within the Kansas City Metro area was heard before the House Small Business Committee and the  Senate Jobs, Economic Development and Local Government Committee this week, sparking coordination between lawmakers seeking to end the ‘Border War’ with neighboring Kansas.

Bill Hall, president of the Hall Family Foundation, testifies in front of a Missouri Senate Committee.

Bill Hall, president of the Hall Family Foundation, testifies in front of a Missouri Senate Committee.

House Speaker Tim Jones, R-Eureka, who sponsors House Bill 1646, testified that businesses in the Kansas City area are collecting generous incentives from both states by “shuffling” existing jobs across state lines without creating any new, net job growth.

Legislation offered by Jones and Sen. Ryan Silvey, R-Kansas City, would end incentives for businesses moving between specific KC metro-area counties. Silvey sponsors Senate Bill 635.

Bill Hall presented a study by the Hall Family Foundation that found Kansas and Missouri have waived $217 million of taxes through two programs to shuffle businesses in recent years. Bill Hall, the foundation’s president, testified in favor of both the Senate and House versions of the bill.

“We are waging a wasteful economic development border war – and both states are losing,” Hall testified. “We do not oppose the use of incentives such as Missouri Works when they create new economic activity. We do oppose the wasteful use of incentives when they shuffle existing jobs and produce little or no economic development.”

Kansas counties Douglas, Johnson, Miami, and Wyandotte and Missouri counties Jackson, Clay, Platte, and Cass are included in the bill. Any business moving from one of these counties across state lines into another would be ineligible for incentives. The legislation in both the House and Senate is contingent on Kansas enacting an identical law.

“By working with our counterparts in Kansas rather than against them, it’s my hope we could end this boarder war,” Jones said.

The bill also does not affect expanding businesses, but is specifically targeted to businesses that are relocating between the two states.

Rep. Kevin McManus has also sponsored House Bill 1515, which is a companion bill to Speaker Jones’ bill.

The Missouri Chamber is supportive of this legislation and Tracy King, vice president of governmental affairs, testified on behalf of the bill.

The House Small Business Committee has scheduled an executive session to vote Jones’ bill out next week to move it along for further discussion.

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


Bill would help emerging businesses thrive

Angel Tax Credits are once again a topic in the Missouri legislature.  Bill 1310 offered by representatives Noel Torpey, R-Independence, and HB 1236 offered by Denny Hoskins, R-Warrensburg, were both heard in the House Small Business Committee on Wednesday.  Both bills would  create tax credits to promote  seed-financing capital for emerging businesses throughout the state.

“This legislation is vital to help us compete with other states,” Hoskins testified. “It also helps to promote entrepreneurship and small business here in the state of Missouri.”

The bills would provide tax credits to investors that provide early stage “angel” capital to qualified employers in the state. The tax credits are equal to 50% of the cash investment made by an investor.  The bills, however, differ in who administers the tax credits.  HB 1236 states the regional Missouri Small Business Technology Development Center must administer the credits, while HB1310 delegates the administration of the tax credits to the Missouri Technology Corporation.   The maximum tax credit allowed is $50,000 for a single, qualified Missouri business, or a total of $250,000 in tax credits in a single year per investor. Both bills are capped at $6 million per year and have a ten year sunset provision.

The Missouri Chamber has had a long-standing position of support for angel tax credits and testified on behalf of the bill. “Missouri is a great state for innovation and entrepreneurship,” King said. “The problem occurs when new incubated businesses get to a particular stage of growth, they’re lured away by states that have the Angel Tax Credits.  We must enact this legislation before we lose more potential businesses to other states.”

For more information about angel credits, please contact Tracy King, vice president of governmental affairs for the Missouri Chamber of Commerce and Industry at tking@mochamber.com or by phone at 573-634-3511.