Nixon touts small business tax credits in Cape Girardeau

Gov. Jay Nixon challenged the state's small businesses to add jobs now with help from a new tax incentive program during a visit to the Cape Girardeau Area Chamber of Commerce on Thursday.

"Small businesses are the biggest creator of jobs in our economy," Nixon said. "To help them take that next step, to hire that next round of new workers, we're providing yet another tool to help them grow."

Small businesses with fewer than 50 employees that create jobs paying at or above the county's average wage are eligible for a $10,000 per-employee income tax deduction under the Small Business Jobs Bill, House Bill 1661, recently signed into law by the governor. Cape Girardeau County's average wage is $31,939, according to the Missouri Department of Economic Development.

Businesses can receive a $20,000-per-employee income tax deduction if it offers health insurance and pays at least 50 percent of the employees' insurance premiums.

A small business formed as a sole proprietorship, partnership, S-corporation, C-corporation, limited liability company or limited liability partnership is eligible for the deduction.

The jobs generated must be full time and the employee must stay with the company for one year before the business can receive the tax break. The fiscal note attached to the bill states its effect on state revenue is unknown.

Nixon said the tax deduction will help the state attract businesses.

"When we can put a tool on the table that nobody else has, it gives us yet another differential advantage," Nixon said.

Missouri has created 24,700 jobs so far in 2012, pushing the state's unemployment rate to a 41-month low of 7.3 percent in June. That's a full point lower than the national unemployment rate of 8.2 percent the same month. One factor contributing to lower unemployment rates, however, is the number of people who have simply stopped looking for work. Missouri's labor force had 22,599 fewer people in May than it started the year with, according to the Missouri Economic Research and Information Center. To be counted as unemployed, a person must be actively looking for work.

Nixon also touted exports as a sign Missouri's economy is getting stronger. The state's exports are up by 15.4 percent through the first quarter of 2012, after a record-setting year in 2011 that saw $14.1 billion in Missouri export revenue.

Cape Girardeau Area Chamber of Commerce president and CEO John Mehner said he believed several local businesses will take advantage of the tax deduction program.

Justin Albright, vice president of NAB Automation, which employs about 10 people, said he believes the tax deduction will help businesses like his recoup the cost of hiring new employees. Because his company offers health insurance, he said he would qualify for the $20,000 deduction and is likely to add to his staff this year.

"If you're a business that is already looking to hire some people, it might help accelerate that," Albright said. "If you are an organization that is looking to grow, it's a great tool to get some of that back."

mmiller@semissourian.com

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Pertinent address:

1267 N. Mount Auburn Road, Cape Girardeau MO