Nolte: Governor Signs Missouri Business Tax Relief Plan

JEFFERSON CITY, Mo. – There will be one less hurdle for businesses to expand and hire more workers thanks to legislation advanced by Representative Jerry Nolte which was signed into law today. Gov. Jay Nixon signed the legislation (SB 19) that was handled in the Missouri House by Rep. Jerry Nolte, R-Gladstone, that eliminates the state’s corporate franchise tax. The legislation, which would phase out the franchise tax over a period of five years until it is repealed entirely in 2016, is similar to another bill sponsored by Nolte (HB 76) that was approved by the House earlier this year.

“This is a great day for Missouri businesses as we eliminate an unnecessary tax and remove an artificial barrier that for years kept some businesses from expanding and hiring more workers,” said Nolte.

The late Senator Harry Wiggins (D-Kansas City), a strong advocate of eliminating the franchise tax, described it as “a tax businesses pay for the privilege of paying other taxes.” The franchise tax, which is a tax on a corporation’s assets such as inventory and buildings, is a “temporary tax” in existence since 1917. While the legislature has reduced the tax over the years, leading business organizations have proposed doing away with the tax entirely as part of the “Fix the Six” legislative package. Nolte’s bill will reduce the tax each year until it is phased out entirely in 2016.

“Lowering the tax burden will make our state a more attractive location for businesses that seek to relocate and it will make it easier for existing businesses to grow,” said Nolte. “We must remain competitive with states like Kansas, which recently repealed its franchise tax. By lowering our tax burden we will send a strong message that Missouri is open and ready for business.”

Nolte said Missouri is one of only a few states that have both a corporate income tax and a corporate franchise tax. He said eliminating what is, in effect, double taxation would put Missouri on a level playing field with other states that are competing to attract new businesses and jobs.

The legislation will go into effect August 28.