SPOTLIGHT PROGRAMS

Missouri Works: Businesses that create new full-time jobs in Missouri may be eligible for a tax incentive and payroll benefit through the Missouri Works program which awards businesses the ability to retain the state withholding taxes of newly created jobs and, in some cases, receive a refundable, sellable, or transferable corporate income tax credit equivalent to a percentage of new payroll created.  

Incentive awards for all but Qualified Military Projects are for up to five years with existing Missouri companies eligible for an additional year of benefits. The actual value of the incentive award will be based on the number of jobs created, project location, and total payroll. The minimum average wage requirement for the program is the lesser of the county average wage or the statewide average wage.

For high-impact projects, the state can award an additional payroll benefit award beyond the automatic benefit listed as additional tax credits. In addition, the state can award a highly discretionary “deal closing fund” award whereby the full value of the total tax credit award over the life of the award can be claimed in the first year to accelerate benefits and offset project upfront costs.

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‍Business Use Incentives for Large Scale Development (BUILD) Bonds: Large economic development projects locating in Missouri may be eligible for refundable tax credits generated through the BUILD financing program.  Through the program, a project’s capital investment in infrastructure is financed through BUILD bonds with the company making principal and interest payments.  The Department of Revenue issues refundable tax credits equal to the debt service payments for the company to use effectively making the program a grant reimbursement for the infrastructure costs incurred. To be eligible, manufacturing and R&D projects must invest a minimum of $15 million and create at least 100 jobs.  Office and headquarters projects must invest a minimum of $10 million and create at least 500 jobs (200 if in a distressed community).

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TAX CREDITS

Business Facility Headquarters Tax Credit Program: This program provides tax incentives to facilitate the expansion of new or existing business in Missouri. Eligible business facilities include engineering firms, architectural firms, and accounting firms. To receive tax credits in any of the ten years the facility must create 25 new jobs and make $1 million in investment in that year compared to the base year. They also must maintain a total new facility investment of at least $20 million and total employment of at least 500 new facility employees.

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‍R&D Tax Credit: State income tax credit equivalent to 15% of qualified research expenses. Companies can receive an additional 5% credit for qualifying research expenses related to research conducted with a Missouri-based university. The program has a credit cap of $10 million annually with no single company allowed to receive more than $300,000 in credits per year. Of the $10 million cap, $5 million is reserved for minority and women business enterprises and small businesses. New businesses, defined as a business less than five years old, are issued full tax credits first.

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TAX EXEMPTIONS/ABATEMENTS

Data Center Sales and Utility Tax Exemption: Businesses that create 10 full-time jobs with wages that are at or above 150% of the county average wage and invest $25 million in a new data center facility within a 36-month window may receive a full 15-year exemption of sales and utility taxes associated with the data center. A 10-year exemption is available for companies that expand an existing data center facility by investing $5 million within 12 months and creating at least 5 full-time jobs with wages that are at or above 150% of the county average wage within 24 months. In addition, a consortium of eligible companies may aggregate their jobs and investment at the same facility to achieve the minimum thresholds.‍

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Sales Tax Exemption for Manufacturers and R&D: Electrical energy, gas, water, coal, energy sources, chemicals, machinery equipment, and materials used or consumed in a manufacturing or R&D process is exempt from sales and use tax.

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JOB TRAINING

Missouri One Start: Missouri’s training programs are designed to be flexible so companies can effectively recruit and train their current and future workforce in new or improved processes. Funding can be targeted to include areas such as technical training, quality training, or soft skills training. Eligible companies can be reimbursed for training expenses incurred through hired training partners, community colleges, their own internal resources, or any combination of all three. Training awards typically average $1,000-$3,000 per qualified employee, and the overall level of assistance is determined by the number of jobs, the wages, and availability of resources.

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DIRECT FINANCIAL ASSISTANCE

Advanced Industrial Manufacturing Zones Act: This act establishes the Port Authority AIM Fund which consists of 50% of the state withholding tax from new jobs within the zone after the development or redevelopment has begun. The zones are identified and established through resolution by Port Authority commissioners. To be eligible for the retention tax withholdings there must be an increase in the number of full-time employees located at the facility. New employees must be paid at or above the state average wage. The AIM Zone Fund may be used for managerial, engineering, legal, research, promotion, planning, satisfaction of bonds, and any other expenses.

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LOCAL INCENTIVES

Chapter 100 Industrial Revenue Bonds: Local governments in Missouri can offer real and/or personal property tax abatements to businesses through the issuing of Chapter 100 Industrial Revenue Bonds.  Companies eligible for Chapter 100 bond financing include manufacturing, warehousing, distribution, office, research and development, agricultural processing, and services in interstate commerce. In the St. Louis and Kansas City metropolitan areas, local governments can provide similar tax abatements and exemptions through their corresponding Land Clearance for Redevelopment Authorities or their Port Authorities.

The incentive can also provide a sales tax exemption on tangible personal property purchased through Chapter 100 bonds for non-manufacturing purchases as well as building materials for real property investment.

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Last Updated: April 2023