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 deductible), 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).
Other Local Development Programs:
- City of Branson Economic Development Incentives
- City of Hollister Economic Development Incentive Policy
State Incentives – New or Expanding “Primary” Businesses
Missouri is considered by many site selection consultants to have one of the most aggressive 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 sale-able. 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
- Small Business Development Centers
- Action Fund Loan: This is a discretionary loan for a “primary” business in need of additional funding to complete a project. The loan is subordinated to a bank’s loan for the project. 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 to fund public improvements needed to facilitate a “primary” business project.