HB 357 - Under current law, enhanced enterprise zone tax credits are equal to the lesser of the annual amount of projected state economic benefit for the enhanced business enterprise, as determined by the department of economic development, or the sum of credits calculated at four hundred dollars for each new business facility employee employed within an enhanced enterprise zone, four hundred dollars for each new business facility employee who is a resident of the enhanced enterprise zone, and four hundred dollars for each new business facility employee who receives a wage that exceeds the average county wage in the county in which the facility is located. Taxpayers are allowed to receive enhanced enterprise zone tax credits each year for up to ten years for establishing a new business facility. Taxpayers are prohibited from receiving multiple ten year periods for subsequent expansion the same business facility. This act reduces the number of years a taxpayer may receive such tax credits to five years and prohibits taxpayers from receiving multiple five year periods for subsequent expansions at the same business facility. The act also changes the amount of the credit to an amount equal to the lesser of the annual amount of projected state economic benefit for the enhanced business enterprise, as determined by the department, or up to two and one-half percent of the gross wages of each new business facility employee plus up to one-half of one percent of new business facility investment.
The act expands the enhanced enterprise zone program to allow dormant manufacturing zones to be designated as enhanced enterprise zones. Any taxpayer that establishes a new business facility in a dormant manufacturing zones may be eligible to receive enhanced enterprise zone tax credits. To receive the tax credit, a taxpayer must employ at least two new individuals at the new business facility or invest at least $100,000 during the taxable year in which the credit is claimed. A taxpayer who receives this tax credit cannot also receive tax credits or other benefits for the same new jobs from the new or expanded business facilities tax credit, enterprise zones tax benefit, tax credit for relocating a business to a distressed community, or enhanced enterprise zones tax credit or the Missouri Quality Jobs Program.
Tax credits for new business facilities in dormant manufacturing plant zones approved or designated as an enhanced enterprise zone will be included in the $24 million annual cap on tax credits authorized for all enhanced enterprise zones. A taxpayer may receive enhanced enterprise zone tax credits for the expansion of an existing facility if such expansion involves an investment of at least $1 million during the applicable tax period results in the at least two new or retained employees during the tax year in which the credit is claimed. The credits for new business facilities established in a dormant manufacturing zone must be claimed for the taxable year in which commencement of commercial operations occurs at the new business facility and for each of the following five years in which the credit is issued. The credits are refundable and transferable but cannot be carried forward.
Prior to the issuance of any tax credits, the department of economic development must verify through the Department of Revenue or any other state department that the applicant does not owe any delinquent taxes, interest or penalties on any taxes, or any delinquent fees or assessments. A taxpayer who is delinquent after June 15 but before July 1 of any year will be given 30 days to satisfy the delinquency. Any available credits will be applied to delinquencies, and any remaining credits will be issued to the applicant subject to the restrictions of other provisions of law.
The act is similar to provisions contained in the HCS/HB 468 (2011).
JASON ZAMKUS