Companies that create jobs can keep part of state income taxes paid by their employees.
As Gov. Matt Blunt signed an economic stimulus bill into law Tuesday, economic development officials said companies are already expressing interest in creating new jobs in Missouri in order to take advantage of the measure's financial incentives.
Dubbed the Missouri Quality Jobs Act, the bill allows qualifying companies that create jobs to keep a portion of state income taxes paid by their employees for up to five years. The jobs created must pay wages at least equal to the average wage in the county in which the company is located or the average statewide wage, whichever is lower. The company must also provide health insurance and pay at least 50 percent of employee premiums.
Blunt said the bill provides makes Missouri more attractive to companies thinking of locating in the state and also provides existing businesses with incentives to expand. Blunt said the bill is a vital part of his efforts to improve the state's economy.
"Virtually everything we want to do in government is dependent on job creation," Blunt said. "When you create jobs you're not only providing people with economic opportunity, you're going to create tax revenue for state and local government." Joined by area lawmakers and local business leaders, Blunt symbolically signed the bill at the Procter & Gamble plant near Fruitland. He officially made the measure law earlier in the day during a five-city swing around Missouri touting the bill, which the legislature passed this spring at his request. It takes effect Aug. 28.
Cape Girardeau Area MAGNET executive director Mitch Robinson said his group, which recruits businesses to the region, is already in negotiations with a company interested in taking advantage of the bill. He declined to name the company.
"We hope to have one of the first projects under the Quality Jobs program," Robinson said. "This is a tool the state needs to be competitive."
Missouri Department of Economic Development director Greg Steinhoff said his agency began fielding inquiries from companies before the bill even cleared the legislature.
"I am very excited at the level of interest," Steinhoff said. "We are very busy talking with new prospects we never anticipated."
While certain government incentives let companies receive tax breaks before creating a single job, Blunt said the bill ensures companies follow through by withholding the financial rewards until the promised jobs materialize.
Blunt said an existing company like Procter & Gamble could benefit from the bill by expanding operations. State Sen. Matt Bartle, a Lee's Summit Republican and the bill's sponsor, said Kentucky and Oklahoma are the only other states with similar economic incentives.
Casinos, retail establishments and bars and restaurants do not qualify for the program. Workers receive full credit for having paid state income taxes retained by their employer.
The measure also gives cities and county the power to levy, subject to voter approval, an additional half-cent sales tax for economic development purposes. That local revenue can be used to provide infrastructure for industrial or business parks, marketing campaigns to attract companies and job training. The money is precluded from being used for retail development, except when part of a redevelopment of a downtown area or historic district.
The bill is SB 343.