JEFFERSON CITY, Mo. (AP) - Missouri small businesses could soon be getting a state tax break for hiring new workers and longer grace periods from many new state regulations and fee increases.
Newly passed legislation would extend through 2014 existing restrictions on many fee increases and new state regulations affecting small businesses.
The bill also would offer an income tax deduction for each new employee hired by small businesses with a salary that at least matches the county's average wage. Another portion of the bill would require the Legislature to approve federal mandates before they're implemented by the state.
Lawmakers gave the measure final approval this past week, sending the legislation to Gov. Jay Nixon.
Rep. Denny Hoskins, who sponsored the small business bill, said it is part of the steps necessary to boost employment in Missouri. He said the legislation could persuade businesses that are wavering on whether to hire someone to go ahead and do so.
Missouri's unemployment rate declined in March, but the state's jobless rate has been at least 9 percent since April 2009.
"It's basically a job and economic tool for Main Street, not for Wall Street," said Hoskins, R-Warrensburg.
Under the legislation, businesses could claim a $10,000 state income tax deduction for each new full-time job created. The tax deduction would double if the business also pays half of the new workers' health insurance premiums. The deductions are estimated to translate into a tax break of $600 to $1,200 per job.
Some of the bill's critics expressed concern about the cost of offering more state tax breaks.
Rep. Stephen Webber said lawmakers have eroded Missouri's tax base and that the lost revenue has contributed to the need for spending cuts. Citing the example of the elementary school he attended, Webber said current students do not have the same opportunities he did to go on field trips to the zoo and a science center, and to be taught by a dedicated science teacher.
"I understand the need to create jobs. I think by a deduction 52 weeks later, you're not going to do that. You're probably giving a deduction for jobs that people would already create anyway," said Webber, D-Columbia.
The restrictions on user fees and state regulations in the new legislation would extend existing limitations in Missouri from 2013 to 2014.
The new state regulations that can be enacted also are limited over that period. The bill approved this year would add an extra year and make it a five-year ban for both.
Except for new state regulations ordered by the Legislature or necessary for a federal mandate or federal program, state agencies must certify that new rules don't hurt businesses with less than 25 employees, exempt small businesses or certify that the new regulation is needed for the health and safety of the public.
The new legislation increases that threshold to 50 employees.
Brad Jones, with the National Federation of Independent Business, said the restrictions on state fees and regulations are particularly important and can boost the confidence of small businesses thinking about hiring additional workers. He said employers could use money saved through the tax deduction to invest in their businesses.
"This isn't the end-all be-all for small businesses, but it certainly is helpful," Jones said.
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Small businesses is HB45
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Legislature: http://www.moga.mo.gov