Opponents get their say during debate on final passage, but can only criticize the measure; they can’t stop the House from approving elimination of the corporate franchise tax.
Sponsor Jerry Nolte, a Republican from Gladstone, stated the tax is outdated and suppresses the state’s economic development. HCS/HB 76 would eliminate the tax on business assets over a five-year period. Nolte and supporters claim the move will make Missouri more business friendly and lead to job creation which will more than offset the $87 million a year the state would be giving up.
The legislature has reduced the number of corporations which pays the tax over the years. In 2009, the legislature raised the franchise tax exemption to $10 million in assets, reducing the businesses paying it to approximately 3,000. Supporters say very few states levy the tax anymore.
Debate on final passage Thursday was dominated by opponents, who claim the state cannot afford the loss of revenue. Rep. Ed Schieffer (D-Troy) questioned how lawmakers will be able to explain to constituents how the legislature can justify making cuts to education, mental health and social programs while giving money away to big businesses.
House Minority Leader Mike Talboy, a Democrat from Kansas City, suggested that Missouri has lost jobs to Kansas in his area, not because of the franchise tax, but because Kansas offers up-front incentives, something Missouri does not.
The House brushed aside such concerns and approved the bill 106-to-52. It now moves to the Senate which has approved a similar version on a 29-4 vote.
