HCS HB 458 -- FRANCHISE TAX RATES AND FINANCIAL INSTITUTION TAX
CREDITS

SPONSOR:  Sutherland

COMMITTEE ACTION:  Voted "do pass" by the Committee on Ways and
Means by a vote of 6 to 1 with 1 present.

This substitute changes the annual franchise tax rates and income
threshold amounts for corporations beginning with tax year 2008.
By tax year 2010, the tax rate will be zero.

The tax credit for financial institution taxes paid is also
changed beginning with tax year 2008.  By tax year 2012, the
annual tax credit will equal 1/20 of 1% of the financial
institution's outstanding share and surplus employed in Missouri
if the outstanding shares exceed $1 million.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 in FY
2008, $8,414,001 in FY 2009, and $148,475,596 to Unknown in FY
2010.  No impact on Other State Funds in FY 2008, FY 2009, and FY
2010.

PROPONENTS:  Supporters say that the franchise tax is a tax on
all corporations with assets over $1 million.  It is a form of
double taxation since it takes the balance sheet amounts over the
minimum threshold and requires the corporation to pay taxes on
it.  This adds up quickly since it includes assets and inventory.
Franchise tax is where a business must pay a tax so they can pay
another tax.  For some businesses, it isn't a large amount, but
the administration costs could be eliminated for them with the
bill.  Missouri is not a high tax state, but a complicated tax
state; and the bill will be a good step toward simplifying the
tax structure.  Twenty states already have a franchise tax, and
Kansas is looking into one.

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

OPPONENTS:  There was no opposition voiced to the committee.

Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:19 am