By Christopher D. Vanderbeek
Good news for Missouri: A survey conducted recently by the United States Chamber of Commerce has determined Missouri to be the seventh most business-friendly state in the country, according to its ranking in the survey’s “taxes and regulation” category.
The category took into account five criteria affecting businesses and economic functioning: overall state and local tax burden, corporate tax burden, impact of “government-imposed and related costs” on small businesses and entrepreneurs, anticipated state budget gap in fiscal year 2012, and cost of living. Missouri was ranked in the top twenty in all five criteria. It ranked eighth in terms of cost of living.
The study specifically recognized Missouri for “comprehensive reforms” in its workers’ compensation system in recent years. This language undoubtedly refers, at least in part, to the sweeping amendments enacted in 2005. Prior to 2005, the system generally favored injured employees. However, the 2005 amendments dramatically shifted the landscape in favor of employers. A microcosm of the shift can be found in Missouri’s statutory directive regarding judicial interpretation of workers’ compensation statutes: prior to 2005, judges were directed to generally interpret the statutes liberally and in favor of employees, but the 2005 amendments called for “strict interpretation” of all statutes and struck the language regarding favoring employees.
The survey further noted the recent passage of legislation in Missouri to eliminate the state franchise tax. It is suggested that the measure will save Missouri businesses $80 million over the six-year period during which the tax is phased out.
Finally, the survey credited Missouri’s tax credit programs and state tax structure with providing corporations with “one of the most favorable situations in the nation.” For example, the state only considers income earned within the state taxable. Furthermore, manufacturer inventories (such as raw materials), as well as goods held by retailers, distributors and wholesalers, are exempt from property taxes.
What this means for Missouri businesses is, essentially, that Missouri is a great place to start, run, or relocate a business. The state tax structure allows businesses to keep a higher percentage of earned income than they would be able to keep in most other states. In addition, the employer-friendly workers’ compensation system keeps workers’ compensation insurance carriers’ liability exposures down relative to other states, which in turn bolsters relative the earning capacities of Missouri businesses even further.
The full U.S. Chamber survey report is available here.
07/18/11 7:36 AM
Filed under Business Law, Emerging Business, Tax | Comments Off
