Mayer: Senate Advances Bill to Spur Job Creation

Just six weeks into the 2011 Legislative Session we have passed a measure to help spur job creation in our state. The Missouri Senate passed Senate Bill 19 last week sending the measure to the House for similar consideration. This bill would first freeze and then phase out Missouri’s corporate franchise tax over a five year period.

By limiting and then ending this double taxation on employers we eliminate a disincentive that penalized companies for investing more in our state. Now, companies can invest in hiring new employees instead of growing government through higher taxes.

The corporate franchise tax is based on a percentage of a company’s assets. Corporations also pay income taxes on their earned income as well as sales and property taxes in Missouri. The bill caps corporate franchise tax liabilities at the amount of each corporation's tax liability for the 2010 tax year. New businesses would be capped at the amount of their corporation's franchise tax liability for its first full year of existence. Then, beginning January 1, 2012, the tax would be phased out over a five-year period.

Missouri is one of a few states that still charge businesses a tax just to expand or invest in our state. Kansas has been phasing out its franchise tax since 2007, and beginning in tax year 2011, it will be repealed altogether. The bottom line is that the corporate franchise tax is an outdated tax that is only still imposed in a handful of states. While other states raise taxes on business in an attempt to close their budget gaps, we can set Missouri apart and make it clear that this is a place where businesses can expand and create jobs without being penalized.

This bill is the first step to help put the more than 280,000 Missourians who have been out of work for the past year and a half back to work in good-paying jobs with benefits. By ending this double tax, we are making sure Missouri is competitive when it comes to bringing new investments and jobs to our state.

Putting Missourians back to work tops the Senate’s priority list for the 2011 Legislative Session. That is why I am glad we were able to pass this bill so quickly, while also advancing several other pro-job bills through the legislative process. Those other measures include protecting workers from being personally sued for their role in honest accidents at work, restoring balance and creating certainty in Missouri’s employment laws, and protecting a workers’ liberty by making sure joining a union or paying dues can no longer be a condition of getting or keeping a job.

In local news, you may have heard I have introduced a measure [SB63] to protect Southeast Missouri’s water supply for local farmers and residents. Southeast Missouri is home to a rich aquifer. In order to preserve and protect this valuable resource, I have filed legislation that would give the state authority to block non-local, major water producers and users from tapping into our aquifer and pumping the water elsewhere if it is to the detriment of resident agriculture, business and industry. This new authority can better preserve our water supply, especially during times of drought. To ensure compliance, the bill would allow the Attorney General to seek an injunction on behalf of residents if a disruption of water use occurs. The Senate Committee on Agriculture, Food Production and Outdoor Resources heard the bill last week. I anticipate the committee will recommend the measure move to the full Senate for debate.

Please feel free to contact me throughout the year with any comments, questions, or issues using the information listed below and on my website at www.senate.mo.gov/mayer.