A proposal that would eliminate the corporate franchise tax for most Missouri businesses has breezed to preliminary passage in the House, but not without one critic raising questions about the tax give-away.
Rep. Mike Sutherland (R-Warrenton) sponsors HB 86 that would raise the asset level for paying the corporate franchise tax from $1 million to $10 million, effectively eliminating the tax for 12,000 of the 15,000 Missouri businesses which pay it now.
The issue has come before the legislature before. It might benefit from a sense of urgency due to the economic downturn. Some representatives say they had mixed feelings before, but now see the issue as an economic development tool that could ease the financial pressure on hard-pressed small businesses.
Rep. J-C Kuessner (D-Eminence) has raised questions about the proposal. Kuessner contends that corporations pay few state taxes now and don’t need another tax break. He warns colleagues that the beleaguered state budget can ill afford another financial hit and that if legislators approve this tax break someone else will have to make up the $12 million in revenue the state will lose.
Despite the warning, the bill wins preliminary approval 143-to-17, needing another favorable vote to move to the Senate.