Missouri senators endorsed legislation Monday to curb a state tax on companies' assets, which supporters said they think would help boost economic development.
The Senate approved bills to reduce the franchise tax rate over five years until it is repealed for the 2016 tax year and to freeze what businesses are required to pay under the tax so that firms would not pay more than what they paid last year.
Sen. Eric Schmitt, who sponsored the legislation, said the franchise tax is a disincentive for businesses to expand within Missouri.
"It is a double-tax. It is an antiquated tax," said Schmitt, R-Glendale.
Since 1917, Missouri has charged a franchise tax on corporations' assets such as inventory and buildings, though the state gradually has reduced the tax rate and exempted smaller businesses. In 2009, lawmakers exempted firms with less than $10 million in assets.
The Senate voted 29-3 to give first-round approval to a bill that includes a phase-out of the franchise tax. The three opponents were Democrats. Lawmakers also gave first-round approval Monday by voice vote to a separate bill that freezes the franchise tax at what businesses owed last year.
Both franchise tax bills require another vote before they can move to the House.
House members are considering their own legislation that would freeze the tax at what businesses owed in 2010.
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