Missouri House votes to exempt more businesses from franchise tax

Wednesday, February 25, 2009 | 2:11 p.m. CST

JEFFERSON CITY — The Missouri House gives first-round approval to legislation eliminating a tax for the state's smaller corporations.

The House voted 143-17 Wednesday to exempt more companies from paying business franchise taxes by excusing those worth $10 million or less.

The business franchise tax is a levy on corporations' assets, inventory and property. Over the last 90 years, the Legislature has lowered the franchise tax rate and exempted smaller businesses.

House member Mike Sutherland, R-Warrenton, who has sponsored similar proposals in the past, says the levy is a "double tax" because companies also pay taxes on their earnings. Sutherland says limiting the tax would spur economic development.

Critics contend it's a giveaway to businesses.

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