Missouri Enterprise Tax Benefit Program

Because of a change in Missouri law, SB 1155 (2004), the Enterprise Zone and New/Expanding Business Facility State Tax Incentive Programs are being phased out.

Only a facility that has commenced operations or put its development into use on or before December 31, 2004, can be eligible for the state tax incentives under the past program. Facilities that do not commence operations until January 1, 2005, or later, will not be eligible to receive the state tax incentives under the past programs. Facilities already in the programs as of December 31, 2004, will continue to receive the state tax incentives under these programs for up to ten years as provided in the law. These facilities are considered to be "grandfathered" into the programs.

The 2004 law creates what is now called Enhanced Enterprise Zones. For a business to qualify for the Missouri Enterprise Tax Benefit Program, the business must now be located in an Enhanced Enterprise Zone. Enhanced Enterprise Zones are specified geographic areas designated by local governments and certified by the Department of Economic Development (DED). Zone designation is based on certain demographic criteria, the potential to create sustainable jobs in a targeted industry and a demonstrated impact on local industry cluster development.

An eligible business must be located in a Missouri Enhanced Enterprise Zone (EEZ). Individual business eligibility will be determined by the zone, based on creation of sustainable jobs in a targeted industry or demonstrated impact on local industry cluster development. Service industries can be eligible if a majority of their annual revenues will be derived from services provided out of the state. Headquarters or administrative offices of an otherwise excluded business may qualify if the offices serve a multi-state territory. The company cannot have been announced or construction started prior to the approval process.

The Enhanced Enterprise Zone Program is a discretionary program offering state tax credits, accompanied by local real property tax abatement, to Enhanced Business Enterprises. Tax credits may be provided each year for up to five tax years, based on tax credits reserved for the project after the project commences operations.

To receive tax credits for any of the years, the facility must create and maintain the minimum:

• New or expanded business facility – 2 new employees and $100,000 new investment;
• Replacement business facility – 2 new employees and $1,000,000 new investment

Eligible investment expenditures include the original cost of machinery, equipment, furniture, fixtures, land and building, and/or eight times the annual rental rate paid for the same. Inventory is not eligible.

For more information about this program visit Enhanced Enterprise Zone or contact: