SB 2 - This act establishes the Manufacturing Jobs Act which allows qualified suppliers or manufacturing companies that create or retain Missouri jobs to retain employee withholding taxes for a period of years. The total amount of withholding taxes retained by any one qualified company under the program is limited to no more than ten million dollars annually. The aggregate amount of retained withholding taxes authorized under the program cannot exceed fifteen million dollars per year. The act reserves fifteen million dollars from the eighty million dollar annual aggregate cap on quality jobs tax benefits for withholding taxes retained by qualified manufacturers and suppliers under the Manufacturing Jobs Act. A "qualified manufacturing company" is defined as a business which falls under the North American Industry Classification System (NAICS) code for automobile or light duty motor vehicle manufacturing, manufactures goods in Missouri, derives more than ten percent of its total sales from goods produced at the facility which are exported outside the United States or derives more than twenty percent of its total sales from goods produced at the facility which are exported outside of Missouri and, in the case of the manufacture of a new product, makes an additional capital investment of at least $75,000 per full-time employee retained at the facility within two years from the date such manufacturing company begins to retain withholding taxes. Where a manufacturing company modifies or expands the manufacture of an existing product, such company must commit to make a capital investment of at least fifty thousand dollars per retained job within two years from the date such manufacturing company begins to retain withholding taxes. Qualified manufacturing companies must manufacture a new product, modify or expand an existing product, or commence making capital improvements for the manufacture, expansion, or modification of an existing product and continue to meet all requirements of a qualified manufacturing company for the withholding period.
The act defines a "qualified supplier" as a company which derives more than 10% of its total annual revenues from sales to a qualified manufacturing company, adds five or more new jobs, pays wages for new jobs that are equal to or exceed the lower of the county average wage or the industry average wage for Missouri but are not less than sixty percent of the statewide average wage, and provides health insurance to employees and pays at least 50% of the insurance premiums.
The Department of Economic Development must respond to a qualified manufacturing facility or qualified supplier who provides a notice of intent to receive benefits under the program with either an approval or rejection within 30 days of receiving such notice. Failure of the department to respond will result in the notice of intent being deemed an approval.
Upon approval of a notice of intent by the department and the execution of an agreement with the department which memorializes the contents of the notice of intent including recapture and repayment provisions, a qualified manufacturing company which manufactures a new product may retain 100% of the withholding taxes from retained jobs for 10 years and a qualified manufacturing company which modifies or expands the manufacture of an existing product may retain 50% of the withholding taxes from retained jobs for 7 years. Qualified manufacturing companies will remain eligible to participate in the Missouri Quality Jobs Program for any new jobs for which it does not retain withholding taxes under the Manufacturing Jobs Act. Qualified manufacturing companies are prohibited from simultaneously receiving benefits under the Business Use Incentives for Large Scale Development Program (Sections 100.700 to 100.850), the New or Expanded Business Facilities Program (Sections 135.100 - 135.150, RSMo), the Enterprise Zones Program (Sections 135.200 - 135.286), the Relocation of a Business to a Distressed Community Program (Section 135.535), or the Rural Empowerment Zones Program (Sections 135.900 - 135.906). If a qualified manufacturing company is utilizing withholding taxes from the new jobs for any other state program, the taxes will first be credited to the other state program before they will begin to accrue to this program. If the qualified manufacturing company is participating in the new jobs training program, it cannot retain any withholding taxes that are already allocated for use in that program.
Upon approval of a notice of intent by the department, a qualified supplier may retain 100% of the withholding taxes from new jobs for three years, if the supplier pays wages for such new jobs that are equal to or greater than the lesser of the county average wage or the industry average wage for Missouri provided such wage is not lower than sixty percent of the statewide average wage. If a qualified supplier pays wages for the new jobs that are equal to or greater than 120% of the county average wage, it can retain 100% of the withholding taxes for new jobs withholding taxes for five years.
Taxpayers awarded benefits under the Manufacturing Jobs Act that knowingly hire individuals who are not allowed to work legally in the United States will immediately forfeit benefits received and repay the state an amount equal to any withholding taxes already retained. A qualified manufacturing company that fails make the requisite amount of capital investment within the two year time period will be required to repay all benefits previously obtained from the state with five percent interest per year from the date the benefit was originally received. In the event a qualified manufacturing companies failure to meet capital investment requirements is due to economic conditions beyond the control of such company, the director the department of economic development may, upon request of such company, provide a one-time suspension of benefits. If a qualified company discontinues the manufacture of the new product and does not replace it with a subsequent or additional new product, such company must cease retention of withholding taxes and will forfeit all rights to retain withholding taxes for the remainder of the withholding period.
The department must submit an annual report on the manufacturing jobs program to the General Assembly by March first. The report must provide participating facilities and suppliers, the amount of benefits provided, the net state fiscal impact, and the number of new and retained jobs.
The provisions of the act will expire six years from the effective date.
JASON ZAMKUS