State Taxes

Personal

1.5-5.5% on income $9,000 and below 6% on income exceeding $9,000

Corporate

6.25%

In most cases, a company located in Missouri will have a lower corporate tax bill than in other states.

State law sets the corporate income tax rate at 6.25 percent of net taxable income earned by a business in Missouri. In addition, Missouri allows 50 percent of federal income tax payments to be deducted before computing taxable income. Using this deduction, a corporation with a taxable income of $1,000,000 would have a Missouri effective tax rate of only 5.2 percent.

http://www.dor.mo.gov/tax/business/corporate/

Missouri Taxable Income

An important tax advantage for Missouri businesses is the amount of income considered taxable – only income earned in Missouri is taxed. Two allocation options are offered for calculating this income: (1) the three-factor formula, based on sales, property and payroll, or (2) the single-factor formula, based only on sales. Missouri is the only state that permits companies to chose the formula that results in the lesser corporate income tax liability. This means that companies are not penalized for locating property and jobs in Missouri as they are in the other states. In addition, it is important to note that Missouri has not adopted worldwide or nationwide unitary tax assessment in computing multinational corporate income tax liability.

Three-Factor Formula

A single state operation determines its intrastate sales and sales to non-nexus states to find the proportion of total or gross sales. A multi-state company computes these same two types of sales, and in addition, sales originating in another state and terminating in Missouri, to determine Missouri’s proportion of gross sales. Using this percentage of sales and percentages of property and payroll in Missouri, an average results in a ratio that is applied to taxable income.

Single-Factor Formula

The single-factor formula is based only on sales. Fifty percent of interstate sales and 100 percent of Missouri intrastate sales are combined. This total is then divided by gross sales to determine the apportionment of percentage.

Please Reference the “Site Selectors Database” at www.HeartlandJOBS.org for more details

Sales / Use Tax

The 4.225% state sales/use tax rate in Missouri is lower than the rates in 35 other states. Missouri communities have the option of adopting a local sales/use tax, generally ranging from 1/2 to 1%. Counties may also adopt a sales/use tax generally ranging from 1/4 to 1%. Use tax is similar to sales tax, but is imposed when tangible personal property comes into the state is stored, used or consumed in Missouri.

Missouri has responded to the needs of business and industry by providing eleven major exemptions from sales/use taxes:

1. Machinery and equipment used to establish a new, or expand an existing manufacturing facility, provided such machinery / equipment is used directly to manufacture a product ultimately intended for sale.

2. Replacement machinery and equipment used directly in manufacturing a product ultimately intended for sale, provided their acquisition has been necessitated by reason of change in design or product, as opposed to obsolescence.

3. Machinery, equipment and devices which abate air pollution. To qualify for this exemption, a company need only have the appropriate state governmental agency certify that the equipment is pollution control equipment.

4. Machinery, equipment and devices which abate water pollution. To qualify for this exemption, a company need only have the appropriate state governmental agency certify that the equipment is pollution control equipment.

5. Machinery and equipment used to establish a new, or replace or expand an existing material recovery processing plant. The plant must convert recovered materials into a new product or different form.

6. All materials and supplies used to install tax-exempt machinery and equipment.

7. Electricity consumed in the manufacturing process provided the cost of the electricity exceeds 10% of total production costs. The cost of electrical energy consumed in the manufacturing process cannot be included in total production costs to qualify for the exemption. Electricity used for non-manufacturing purposes, such as lighting and heating, is taxable.

8. Electricity or gas, whether natural, artificial or propane when used in connection with basic steelmaking.

9. Electricity that is converted to stored chemical energy for providing an initial charge in lead-acid storage batteries during the manufacturing process, if this electricity is separately metered. This exemption does NOT apply to any local sales taxes.

10. Anodes used in manufacturing or other types of production, with a useful life of less than one year.

11. Computers, computer software, and computer security systems purchased for use by architectural, engineering, or accounting firms headquartered in Missouri.

NOTE: Building materials used to construct a new or expand an existing facility are normally taxable. However if a Missouri city or county retains title to financed properties, the building materials can be acquired by the local government tax-exempt.

http://www.dor.mo.gov/tax/business/sales/

Local Sales Tax

State of Missouri 4.225%

Laclede County 1.0

Cumulative for County 5.225%

Lebanon City 2.0

Cumulative for City 7.225%

Property Taxes Residential:

TAX BREAKDOWN Assessed (19%) $100,000 Resident Property
	TAX	Within Lebanon	Laclede Co
COUNTY	0.0606	$11.51	$11.51
STATE	0.0300	5.70	5.70
HEALTH	0.1000	19.00	19.00
LIBRARY	0.1328	25.23	25.23
SB #40	0.0663	12.59	12.59
LEEP	0.0655	12.44	12.44
CITY	0.5152	97.88	- - - - - -
1 SPECIAL ROAD	0.5411	102.80	- - - - - -
LEBANON SCHOOL	3.2200	611.80	611.80
TOTAL 5	4.731	$898.95	$698.27

Property Tax Commercial / Industrial:

TAX BREAKDOWN Assessed Real Estate (32%) and Personal Commercial and Industrial Property Property (33%) $1,000,000 Real Estate
	TAX	Within Lebanon	Laclede Co
COUNTY	0.0606	$193.92	$193.92
STATE	0.0300	96.00	96.00
HEALTH	0.1000	320.00	320.00
LIBRARY	0.1328	424.96	424.96
SB #40	0.0663	212.16	212.16
LEEP	0.0655	209.60	209.60
CITY	0.5152	1,648.64	- - - - - -
1 SPECIAL ROAD	0.5411	1,731.52	1,731.52
LEBANON SCHOOL	3.2200	10,304.00	10,304.00
SURCHARGE	1.0300	3,296.00	- - - - - -
TOTAL	5.7615	$18,436.80	$13,492.16

State Tax Incentives

The following is a list of tax incentive programs available through the Missouri Department of Economic Development (DED). More details are available under “Site Selection” on the America’s Heartland Economic Partnership (AHEP) website (www.HeartlandJOBS.org) or the DED website (www.MissouriDevelopment.org).

• Sales Tax Exemption for manufacturing machinery and equipment

• Welfare to work Tax Credit

• Work Opportunity Tax Credit

• BUILD Bonds / Tax Credits

• Development Tax Credit

TAX BREAKDOWN Assessed Real Estate (32%) and Personal Commercial and Industrial Property Property (33%) $1,000,000 Personal Property
	TAX	Within Lebanon	Laclede Co
COUNTY	0.0606	$199.98	$199.98
STATE	0.0300	99.00	99.00
HEALTH	0.1000	330.00	330.00
LIBRARY	0.1328	438.24	438.24
SB #40	0.0663	218.79	218.79
LEEP	0.0655	216.15	216.15
CITY	0.5152	1,700.16	- - - - - -
1 SPECIAL ROAD	0.5411	1,785.63	1,785.63
LEBANON SCHOOL	3.2200	10,626.00	10,626.00
SURCHARGE	1.0300	- - - - - -	- - - - - -
TOTAL	5.7615	$15,613.93	$13,913.79

Missouri Quality Jobs Program (Effective 8/28/05)

• Focuses on Small / Expanding Businesses, Technology Businesses, and “High Impact” Businesses

• Jobs created must pay at or above the county average wage

• Benefits include retention of state withholding taxes and state tax credits that are refundable and sellable

• Certain programs cannot be used concurrently with the Quality Jobs Program. These include:

- Enhanced Enterprise Zone Credits

- Business Facilities Credits

• If New Jobs Training Bonds are used, Quality Jobs Program benefits will only be tax credits-not withholding tax

Enhanced Enterprise Zone (EEZ)

• Local seven-member board

• Provides tax abatements on real property ranging between 50% and 100% for a period of not less than 10 years but not more than 25 years

• May provide credits against the state income tax but these are limited and on a “first come” basis

• See “Local” section for details for the Laclede County Enhanced Enterprise Zone

Financial Incentives

• CDBG Action Fund Loans / Guarantees

• CDBG Interim Financing Loans

• Chapter 100 Industrial Revenue Bonds (abatement)

• Tax Exempt Bonds

Workforce Incentives

• Missouri Customized Training Program

• New Jobs Training Program

Local Tax Incentives

General

Lebanon and Laclede County provide a wide choice relative to incentives. The goal is to fashion a “win/win” package. The amount of the incentives is based on the quality and economic impact of the project.

Factors used in calculating the amount of the incentives include:

• Average wages sustained over a 5 year period from date of operation commencement.

• Amount of investment in plant and equipment.

• Value of the fringe benefit package.

• Jobs created or retained.

• Economic impact on the community and return on the public investment.

• Bonus discretionary factors.

More information concerning the Lebanon and Laclede County incentives may be obtained by contacting

Ben Jones by emailing benj@HeartlandJOBS.org or by phone at 417-533-5627.

Laclede County Enhanced Enterprise Zone (EEZ)

• Tax abatements on real property ranging between 50% and 100% for a period of not less than 10 years and not more than 25 years determined by the quality of the project.

• State tax credits may also be available.

• Targeted economic sectors by the North American Industrial Classification System (NAICS) codes include:

31-33 Manufacturing

42 Wholesale Trade

48-49 Transportation and Warehousing

51 Information

54171 Research and Development in the Physical, Engineering, and Life Sciences

54194 Veterinary Services (Testing laboratories)

54138 Testing Laboratories

55 Management of Companies and Enterprises (Must be a headquarters of a regional, national, or international company with at least 75% of the operation outside Laclede County and a minimum of 20 employees)

Other Location Resources

Lebanon and Laclede County have four entities that have the ability to build facility for lease or lease/purchase.