HB 1619 -- FRANCHISE TAX RATES

SPONSOR:  Sutherland

COMMITTEE ACTION:  Voted "do pass" by the Committee on Ways and
Means by a vote of 9 to 5.

This bill changes the annual franchise tax rates and income
threshold amounts for corporations beginning with tax year 2007.
By tax year 2011, the tax rate will be zero.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 in
FY 2007, $1,452,546 in FY 2008, and $3,137,526 in FY 2009.  No
impact on Other State Funds in FY 2007, FY 2008, and FY 2009.

PROPONENTS:  Supporters say that the bill phases out the annual
franchise tax over five years, encouraging businesses to move
into Missouri to replace lost revenue as the rates are lowering.
The franchise tax is counter productive to creating jobs and
bringing in more business.  The estimated annual cost to business
for the franchise tax is $1.2 million.  The continued growth in
revenue from the franchise tax indicates that business growth
made up the change to the $1 million threshold and the rate
change a few years ago.  Also, the elimination of the franchise
tax will reduce utility rates.

Testifying for the bill were Representative Sutherland; Missouri
Chamber of Commerce and Industry; Taxpayers Research Institute of
Missouri; Associated Industries of Missouri; National Federation
of Independent Business; and AT&T.

OPPONENTS:  There was no opposition voiced to the committee.

Karla Strobel, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 2nd Regular Session
Last Updated November 29, 2006 at 9:44 am