Republicans, Chamber applaud Senate approval of $85 million corporate tax cut

Sen. Eric Schmitt sponsored the legislation to repeal the 'franchise tax.'

JEFFERSON CITY, Mo. — The Missouri Senate voted Tuesday, for the second time, to cap and phase-out the state’s ‘franchise tax’ on large corporations.

Republicans and business leaders praised the end of what they call the “double tax,” and said it was a step toward job creation in Missouri.

“By limiting and then ending this double taxation on employers, we eliminate a disincentive that penalized companies for investing more in our state,” said State Senator Eric Schmitt (R-Glendale), the bill’s sponsor. “Now, companies can invest in hiring new employees instead of growing government through higher taxes.”

The bill, as passed in the Senate, will cap the corporation’s tax liability at 2010 levels totaling more than $80 million a year, and starts a five year sunshine in 2012 that will cost the state $40 million.

“This bill is the first step to help put the more than 280,000 Missourians who have been out of work for the past year and a half back to work in good-paying jobs with benefits,” Senate Leader Robert Mayer (R-Dexter) said. “By ending this double tax, we are making sure Missouri is competitive when it comes to bringing new investments and jobs to our state.”

The move was championed by the Missouri Chamber of Commerce, who listed ending the tax on their “Fix the Six” agenda at the beginning of the legislative session.

“It is time to repeal this antiquated double tax.” said Daniel P. Mehan, president/CEO of the Missouri Chamber of Commerce and Industry. “We commend the Senate’s early attention to this issue, which could impact both existing Missouri companies looking to expand and new employers looking for a positive place to do business.”

The Chamber contends that the elimination of the tax will spur job grown, to make Missouri competitive in the region.

“In the current economic climate, Missouri has to fight for every job,” Mehan said. “Any policy we can implement to help businesses grow and expand our workforce is absolutely needed. Ending the corporate franchise tax is one of those positive steps forward.”

The tax phase out passed the Senate 28-4, and will move on to the State House of Representatives, where it is likely to overwhelmingly pass.

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