JEFFERSON CITY — A tax break is on the way for thousands of Missouri businesses.
Gov. Jay Nixon signed legislation Thursday eliminating Missouri's corporate franchise tax for most of the businesses that pay it and enlarging the tax incentives available for employers who expand their payrolls or plants.
Nixon signed the measure into law Thursday in Jefferson City before departing on a ceremonial tour to promote the measure's job-creation potential. He planned stops Thursday in Columbia, St. Louis and Kansas City, with additional events next week.
The legislation, which passed on the final day of Missouri's session, was the top priority this year for the Democratic governor and for some Republican legislative leaders.
But it passed only after supporters of expanded business incentives compromised with lawmakers who fear tax credits are draining the state's budget. The final version includes new limits on tax credits for the renovation of historic buildings and for projects backed by the Missouri Development Finance Board.
The ultimate cost or benefit of the legislation is somewhat unclear. A legislative oversight office had not completed a financial estimate of the measure by Thursday.
Nixon praised the law as a "decisive action to help businesses create jobs."
"By expanding the number of economic tools at our disposal, we'll make sure the world knows Missouri is open for business, and we'll get our workers back on the job," Nixon said in a prepared statement.
He highlighted a portion of the legislation that increases eligibility for state job-training incentives.
The law also will increase the asset threshold that triggers Missouri's franchise tax from $1 million to $10 million. Nixon has said that will exempt about three-quarters of the roughly 20,000 businesses that pay the tax, resulting in a $14.5 million tax cut for small businesses.
The law expands several popular tax credits, including the Quality Jobs program that applies to employers who add jobs with at least average wages and health benefits. The law raises the cap on Quality Jobs tax credits from $60 million to $80 million, giving state economic development officials greater flexibility to target businesses.
The tax credit cap will be raised from $15 million to $25 million for both the New Markets program and the Business Use Incentives for Large-Scale Development program.
The New Markets program provides tax credits to equity investments in development projects located in areas with significant poverty rates or low incomes. The large-scale development program provides aid for companies to pay off bonds used to build their plants.
Supporters are hopeful that the package will encourage expansions by several companies, including St. Louis-based seed-maker Monsanto Co. and battery-maker Kokam America Inc., based in Lee's Summit.
But fewer developers may be able to participate in a state program that provides a tax credit equal to 25 percent of the cost of redeveloping historic buildings. The renovation program has functioned as an entitlement for those who qualify. Through the first three quarters of Missouri's 2009 fiscal year, the state had redeemed more than $157 million of historic preservation tax credits.
The new law limits the state to approving $140 million annually in historic preservation tax credits for large projects. Renovations costing less than $1.1 million will not be subject to the cap — an exception insisted upon by the program's advocates.
The law also limits the number of infrastructure tax credits that can be authorized by the Missouri Development Finance Board to $10 million annually, or $25 million if three executive branch officials approve of the higher figure. Previously, the board could issue an unlimited number of tax credits so long as the executive officials gave their approval.