HB 86 -- CORPORATE FRANCHISE TAX

SPONSOR:  Sutherland

COMMITTEE ACTION:  Voted "do pass" by the Committee on Ways and
Means by a vote of 10 to 2.

Beginning January 1, 2010, this bill increases the outstanding
shares and surplus threshold amount used to calculate a
corporation's annual franchise tax from $1 million to $10
million.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 in
FY 2010, $7,180,344 to $12,200,000 in FY 2011, and $7,180,344 to
$12,200,000 in FY 2012.  No impact on Other State Funds in
FY 2010, FY 2011, and FY 2012.

PROPONENTS:  Supporters say that the bill eliminates the
corporate franchise tax for corporations with assets less than
$10 million by increasing the filing threshold.  Franchise tax is
not a tax on franchise companies, it is a tax on the assets
listed on the balance sheet of a corporation.  The franchise tax
was authorized in 1917; and in 1999, the threshold was increased
to $1 million.  The receipts last year from this tax were $84
million.  The bill will help over 12,000 businesses with assets
under $10 million.  Missouri is only one of a few states still
collecting this tax.  Kansas phased-out this tax a few years ago.
Even corporations with a loss still pay a franchise tax.  It is
the most unfair tax.  While the bill exempts many small and
mid-size taxpayers from filing the franchise tax, it does not
exempt the first $10 million in assets of corporations that are
required to file franchise tax.

Testifying for the bill were Representative Sutherland; Missouri
Chamber of Commerce and Industry; Associated Industries of
Missouri; Taxpayers Research Institute of Missouri; and National
Federation of Independent Business.

OPPONENTS:  There was no opposition voiced to the committee.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:23 am