Income Tax Credits

The Brownfield “Jobs & Investmenlt” Tax Credit Program
Any person or business operating an eligible project of redevelopment on certain abandoned and contaminated property may be eligible to earn state income tax credits for new investment and new jobs for up to 10 years. The program provides state income tax benefits for up to 100% of remediation costs. The company may obtain (for up to 10 years) tax credits between $500 and $1,300 per year for each new job created, tax credits based on 2% (annually) of new capital investment, a 50% income exemption, and abatement of local real property taxes (for up to 15 years).

The eligible project must be in a blighted area and must comply with the Dept. of Natural Resources’ environmental conditions. A new company must create and maintain 10 new jobs, and an existing company must retain 25 jobs to receive benefits.

Missouri Development Finance Board Tax Credit Programs
Any taxpayer may receive a state tax credit equal to 50% of any amount contributed to the Industrial Development and Reserve Fund, the Infrastructure Development Fund, or the Export Finance Fund. Contributions to these funds are used to make direct loans and loan guarantees to new and expanding businesses and nonprofit organizations, and to make grants to public entities. Credits may be transferred or sold and there is a five-year carry-over provision.

Development Tax Credit Program
The state provides income tax credits based on a contribution by a company to a local non-profit corporation (NPC) for projects approved by the Dept. of Economic Development (DED). The amount of credits approved will be based on the economic impact of the project and the minimum amount of credits required to cause the project to occur. The purpose of the program is to create full-time, year-round jobs. The project must be located in a “blighted” or “distressed” area.

Eligible donations include cash, machinery and equipment, and real estate. The NPC will lease the real or personal property to a business entity. The lease is structured to facilitate the business’ project and lease payments will be based on the costs of the non-profit to operate and maintain the subject assets (if any). In most cases the NPC will provide DED the lease payments received in an amount to repay the tax credits plus interest. The tax credits may be used in the year received, or for up to five years if desired. Credits also may be sold or transferred.

Transportation Development Tax Credit Program
A company (or individual) may be provided state income tax credit for up to 50% of either a contribution to a public entity or an investment by the company in a project needed to facilitate a business project or community development/public infrastructure improvement. Eligible activities are generally transportation facilities owned by a public entity for use by the public. The benefit is available for qualified investments in distressed communities. Unused credits can be carried forward for up to 10 years and carried back for the previous three years, and they may be transferred, sold, or assigned.

Other Tax Credit Programs
Missouri offers several programs which provide significant tax credits to businesses making contributions to a variety of projects and funds. Some of the programs include the Business Modernization and Technology (Seed Capital) Tax Credit Program, the Small Business Incubator Tax Credit Program, the Neighborhood Assistance Program, the Skills Development Tax Credit Program, the Historic Preservation Tax Credit Program, and the Community Bank Investment Tax Credit Program. Tax credits available range from 45% to 70% of contributions to qualified projects. Effectively, such programs enable businesses to redirect their tax dollars to help finance local job creation, growth of the tax base, elimination of blight, and a variety of other purposes. Some programs allow credits to be used in ensuing tax periods or to be sold or transferred to other taxpayers.