missouri

MISSOURI Missouri remains at seventh this year on the tax and measures, topping out eighth in cost of living. In recent years, Missouri has enacted comprehensive reforms in its workers’ compensation system and enacted one of the strongest tort reform laws in the country.

Making Prior Cuts Help Stem Crisis the state has maintained that the biggest contributor to the shortfall will be the loss of about $860 million in federal funding. The state has been proactive in working to address potential shortfalls, and efforts included $301.4 slumping revenues.

The state has approved a $23 billion operating budget and, despite budget cuts and low revenue growth, the state is in in our tax and regulation measures, helping the state maintain its AAA bond rating. However, the current budget relies on short-term federal funding sources set to expire, an issue that will need to be addressed by future sessions.

Basic aid for public schools in this year’s budget remains million. Aid to state colleges and universities is reduced by more than 5 percent. As proposed, the state will continue to subsidize prescription drugs for seniors and the disabled.

Other legislation will phase out the state’s franchise tax over a period of six years, saving employers in the state $80 million.

Partnerships Lead the Way The Strategic Initiative for Economic Growth program, spearheaded by the Missouri Department of Economic Development, represents a public-private partnership including business, labor, higher education, and economic development across the state to chart a path for transforming the state’s economy into a long-term, sustainable growth economy. The intent of the plan is to identify a vision for transforming the state’s economy state and addressing factors that support economic growth including innovation, workforce, access to capital, quality of life, tax structure and incentives.

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Missouri’s Place in the Rankings 8th

Cost of Living

8th

Higher-ed Degree Output

16th

Business Tax Climate

17th

State and Local Tax Burden

19th

Budget Gap

19th

Small Business Survival Index

19th 21st

Median Family Income

Missouri’s clusters represent the state’s strongest possibilities for job creation and economic growth. These clusters include advanced manufacturing of transportation equipment, aerospace and defense, energy solutions, biosciences including plant and agriculture technology and animal sciences, health sciences and services, information transportation and logistics. While not excluding other industries or businesses, this focus helps to target scarce state resources towards businesses and industries that are best able to capitalize on the state’s competitive advantages.

To support this effort the state has several programs that retaining new and emerging jobs and businesses. The Action Loan program provides capital to start-up or expansion businesses for the purchase of new machinery and equipment, working capital, building acquisition and construction, and land acquisition. The Grow Missouri Loan facilitates the funding of an expansion project that would create or retain full-time jobs for targeted businesses. Under this program, principal and interest payments may be deferred for up to three years to aid in the initial deferral period, payments may be structured as interest-only for up to three additional years.

Business Friendly Taxes and Regulations To continue to be a leader in business-friendly tax and regulatory climate, the state has worked to optimize its tax, incentive and regulatory policies to best support the growth of high-value target sectors. Following the recommendations of the Economic Development Tax Credits subcommittee of the Missouri Tax Credit Review Commission, Missouri is streamlining and optimizing existing tax credits and providing a research and development tax credit and an angel investment tax credit in the state.

These programs and the tax structure within the state provide corporations with one of the most favorable situations in the nation. An important tax advantage for businesses is the amount of income considered taxable; only income earned in the state is taxed. Manufacturers’ goods), as well as goods and wares of retailers, distributors and wholesalers, are exempt from property taxes. Other advantages include a state law that sets the corporate income tax rate at a percentage of net taxable income earned by a business and allows a portion of federal income tax payments to be deducted before computing taxable income, as well as the state’s recent repeal of the franchise tax.

Boosting Innovation and Manufacturing The Missouri IDEA (Innovation, Development, and Entrepreneurship Advancement) Fund promotes the formation and growth of businesses that engage in the transfer of science and technology into job creation. The

expands the manufacture of an existing product. It also withholding taxes from new jobs for three years. If the equal to or greater than 120 percent of the county average wage for Missouri, it can retain the withholding taxes for To get back on the right track and to create good-paying jobs, Missouri is working to encourage the development and growth of small businesses. The Show Me JOBS initiative is working to put Missourians to work and to support small-business growth. Governor Jay Nixon has noted that “too often, those starting up small businesses are willing to take the risks needed but face obstacles government needs to help such entrepreneurs.” To help bolster these efforts the state, the Department of Economic Development is working collaboratively with the Missouri Development Finance Board to create a pool of funds for low-interest or no-interest direct loans for small businesses.

These loans can be a real step toward allowing small businesses to expand and create jobs.

Clusters in Missouri Largest Cluster: Business & Financial Services, 356,496 jobs Largest Growth Cluster: Business & Financial Services, 56,957 new jobs since 2002

components corresponding to the four stages of growth for investment-grade, high-growth enterprises: pre-seed capital

Most Competitive Cluster: Information Technology & Telecommunications, 2,605 new or retained jobs due to state competitive advantage

The Missouri Automotive Manufacturing Jobs Act

Most Concentrated Cluster: Agribusiness, Food Processing & Technology, 1.60 times the national concentration level

bring next-generation production lines to Missouri to retain withholding taxes typically remitted to the state. Beginning retain 100 percent of the withholding taxes from fulltime jobs at the facility for ten years if it manufactures a new product, or may retain 50 percent of withholding 77