Senate Advances Measure to Rein in Tax Credits

The Missouri Senate today approved a measure to rein in inefficient tax breaks that could save Missouri taxpayers nearly $1.3 billion over the next 15 years.

Senate Bill 120 would cap Missouri’s most costly tax incentives, including the Low-Income Housing and Historic Preservation tax credit programs. Part of the estimated savings from the reduction in those tax credit programs would help fund new job-creating incentives, including credits for data storage centers and the “Missouri Export Incentive Act.”

Senate Leader Tom Dempsey, R-St. Charles, said this comprehensive economic development and tax credit reform bill is part of Senate leadership’s commitment to cutting government waste while creating a more business-friendly environment.

“We have to find the delicate balance of protecting funding for vital programs while offering tax incentives in a financially responsible way to businesses to stay competitive,” said Dempsey. “Offering these efficient tax incentives will help create jobs in the state. With the tremendous savings realized from this important legislation, we can use a portion of that savings to support these new incentives while saving our state more than $1 billion over the next decade.”

Senate Bill 120 would place caps on the Low-Income Housing tax credits at $50 million dollars per year and $45 million for incentives given for Historic Preservation projects. Currently, Missouri allocates more Historic Preservation tax credits than any other state in the nation and is second in Low-Income Housing tax credits, costing Missourians more than $300 million a year.

The new measure would provide tax credits for new data storage centers and also create the “Missouri Export Incentive Act,” which would authorize air export tax incentives for freight forwarders in Missouri.

Senate Eric Schmitt, R-Glendale, says approval of the air export tax incentives is a good example of this legislative session’s push for pro-employment policies.

“Missouri is naturally positioned as a gateway to the rest of the world,” said Schmitt. “It is vitally important that we seize this opportunity to encourage new investment and jobs we currently do not have in our state.  This bill can give Missouri a place in the global marketplace and change the trajectory of our economy for decades.”

According to Majority Floor Leader Ron Richard, R-Joplin, passing SB 120 is part of a broad base tax policy reform underway in the Senate that will make Missouri a part of the global economy

“This bill is the culmination of a lot of hard work and dedication by the Senate in the past few years to create meaningful tax credit reform in our state,” said Richard. “This represents a much better investment of taxpayer dollars, which I believe is what the people of Missouri expect and need.”

The bill will now head to the House for consideration. For more on this bill and others, go to www.senate.mo.gov.