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Missouri Law Creates New Small Business Deduction
By: Mary Reiser
Mary Reiser
Supervising Consultant
Construction & Real Estate
Kansas City
816.221.6300
As a revision to the Big Government Get Off My Back Act of 2009, Missouri House Bill 45 created an income tax deduction for new jobs created by the state’s small businesses.
Effective for taxable years beginning on or after January 1, 2011, and ending on or before December 31, 2014, a business employing fewer than 50 full- or part-time employees can take a $10,000 deduction for each new full-time job with an annual salary of at least the county average wage. The deduction increases to $20,000 for employers who also offer health insurance and pay at least half of the insurance premium. The county average wage is determined by the state Department of Economic Development for the most recently completed calendar year. The statewide average wage will be substituted if it is less than the county average wage.
Fiscal analysis of the bill estimated 94 percent of Missouri firms would qualify as small businesses under the act. The new deduction is expected to create tax benefits of $600–$1,200 per new job, potentially saving Missouri businesses up to $21.4 million per year. The bill, signed into law July 8, 2011, is intended to spur economic growth and protect small businesses in Missouri.
For more on how your business can benefit from these new deductions, contact your BKD advisor or Bob Johnson Jr. at bjohnson@bkd.com.
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