The House Ways and Means Committee today passed a committee substitute for House Bill 458 which would gradually eliminate Missouri's Corporation Franchise Tax, taking a key step in the continued improvement of the state's business climate. Taxpayers Research Institute of Missouri and Associated Industries of Missouri testified in favor of this pro-business legislation.Missouri's franchise tax is a business tax based on a corporation’s assets in or apportioned to Missouri. Small businesses with less than $1 million in outstanding stock or assets do not pay the tax. The franchise tax is not related to the profitability of a corporation, only the value of outstanding stock or assets. A company with limited income or no income must still pay the franchise tax simply for the privilege of doing business in Missouri.
The substitute language in HB 458 would reduce the franchise tax over three years, beginning next year:
- 2008 – The threshold would be raised from $1 million to $15 million
- 2009 – Rate would be cut in half
- 2010 – The franchise tax would be eliminated
AIM and TRIM have fought for this approach to eliminating the franchise tax for the last two legislative sessions.
“Eliminating the franchise tax is important to the business community of this state,” said Ray McCarty, executive director of Taxpayers Research Institute of Missouri. “I commend the bill’s sponsor, Rep. Mike Sutherland, and the House Ways and Means Committee for acting quickly on this legislation.”
Having been approved by the committee, HB 458 will be sent to the House floor for debate.
