The CORE region offers the unique combination of a highly qualified workforce, available properties, and low business costs. All communities utilize a different set of tools and projects; each CORE community will design a custom incentive package based on the needs of your individual project.
State taxes: The State of Missouri is rated the 19th lowest in state/local business taxes by the Tax Foundation. The state corporate income tax rate is 6.25% (net effective since federal tax is deductable), and the personal income tax is graduated up to a maximum of 6%; however, the average rate is 2.7% of gross wages. Other state taxes include corporation franchise, and other specific business type of taxes.
Exempt Business Taxes: In Missouri, the following business taxes are exempt:
- Local property taxes on inventories.
- State and local sales tax on manufacturer’s machinery and equipment.
- State sales tax on energy costs.
- Sales tax on personal property and building materials, if financed with Chapter 100 bonds and approved by the appropriate local entity (city or county) and the state (Dept. of Economic Development).
Property Tax Abatement: There are several different methods that cities or counties may provide property tax abatement for a new/expanding business project, including:
- “Enhanced Enterprise Zone“, which provides automatic abatement of a portion of the new real property taxes, plus, for qualified projects approved by the state, tax credits based on a formula for new payroll and new capital investment.
- Chapter 100 Program: Industrial revenue bonds may be issued by a city or county for certain types of projects. The city/county may own the assets and lease them to the company, and therefore the assets become exempt from real and personal property taxes for the term of the bonds. The city/county would typically require a certain amount of payment in lieu of tax, which is negotiable. The bonds must either be purchased by the company or sold on the basis of the company’s credit, and are not guaranteed by the city/county issuer.
- Chapter 353 Urban Redevelopment Corporation: A city may authorize the formation of a entity formed by a company/developer for a specific area, which must be declared “blighted” and approved for a redevelopment plan. The area then may have the increase in real property taxes due to the project abated for a period approved by the city.
- Tax Increment Financing: A city or county may approve a redevelopment plan for a blighted area, which would include the redirect of new real property taxes and local sales taxes for up to a 23 year period.
Other Local Development Programs:
- Neighborhood Improvement Districts: (67.453 to 67.475) Allows “special assessments” to be paid on property within a defined area, which would be used to pay general obligation bonds issued by a city or county to finance a public infrastructure project.
- Community Improvement Districts: (67.140-67.1571) Allows the creation of a special public entity in a defined area, which can impose a sales tax and/or special assessments to fund a variety of improvements, maintenance, marketing, and other costs which benefits the district.
- Transportation Development Districts: (238.200 to 238.275) Allows the imposition of a sales tax within a defined area to fund bonds issued for transportation purposes (roads, bridges, other). Summary.
- Economic Development Sales Tax: By approval of the voters of a city or county, a sales tax may fund various activities to benefit the economic development of the area.
State Incentives – New or Expanding “Primary” Businesses: Missouri is considered by many site selection consultants to have one of the most agressive incentive packages of any state. Below are incentive for new or expanding “primary” businesses (manufacturing, distribution, office, research and development, services in interstate commerce, and others that do not compete locally):
Missouri Works Program: Program benefits are (a) the retention of the state withholding tax of the new jobs and/or (b) state tax credits, which are refundable, transferable and/or saleable. The program benefits are based on a percentage of the payroll of the new jobs. The program benefits are not provided until the minimum new job threshold is met and the company meets the average wage and health insurance requirements.
State Programs – Small Businesses Financing and Technical Assistance:
- Missouri Business Portal (Resources).
- Small Business Development Centers. (Counseling, training, resources, other).
- Action Fund Loan: This is a discretionary loan for a “primary” business in need of additional funding to complete a project. The loan is limited to the LOWER of either (a) 750,000 per project; 40% of the total project cost; or $25,000 per new job created. The loan is subordinated to a bank’s loan for the project. Eligible areas do not include companies located within the city limits of Columbia or Jefferson City. An application must be submitted by the Sponsor on behalf of the business.
State Programs – Public Infrastructure Development to Facilitate Business Projects:
Industrial Infrastructure Grant: A grant provided to a city or county (not including projects located within Columbia or Jefferson City) to fund public improvements needed to facilitate a “primary” business project.