House committee approves franchise tax elimination

The Missouri House of Representatives’ Committee on Ways and Means Thursday passed House Bill 458, which would phase the tax out over three years.

The tax was eliminated in 1999 for Missouri’s smallest employers – corporations valued at $1 million or less. The tax rate also was reduced by one-third for all other employers.

The new bill eliminates the tax in 2008 for all employers with value up to $15 million. That would exempt about 14,000 of Missouri employers.

Starting in 2009, the tax rate for all remaining employers would be reduced by 50 percent. The rate would be eliminated in 2010.

The Missouri Chamber of Commerce and Industry estimates Missouri employers would save up to $80 million annually after the tax is removed. The state, however, stands to lose about $148.5 million from its general revenue fund in fiscal 2010.