Nolte: Missouri Business Tax Relief Plan Receives Final Legislative Approval

JEFFERSON CITY, Mo. – Legislation that would lower the tax burden for many Missouri businesses by eliminating the corporate franchise tax is now on its way to the governor’s desk. The Missouri House gave final approval to legislation (SB 19) handled by Rep. Jerry Nolte, R-Gladstone, that would phase out the franchise tax over a period of five years until it is repealed entirely in 2016. The House approved SB 19 by a vote of 105-51. The legislation is similar to another bill sponsored by Nolte (HB 76) that was approved by the House earlier this year.

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 “We must remain competitive with states like Kansas, which recently repealed its franchise tax.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.

SB 19 now moves to the governor’s desk to be signed into law.