HB 1202 Modifies provisions relating to incentives for new businesses

Current Bill Summary

- Prepared by Senate Research -


HCS/HB 1202 - This act modifies provisions relating to incentives for new businesses.

STATE CONTRACTS

This act establishes the "Right to Start Act", which, beginning July 1, 2023, requires five percent of all state contracts to be awarded to businesses that have been in operation for less than five years. (Section 34.195)

This provision is substantially similar to a provision contained in SB 578 (2021).

CORPORATE INCOME TAX

Current law authorizes a taxpayer to deduct a portion of such taxpayer's business income from the taxpayer's federal adjusted gross income. For taxpayers that begin business operations in Missouri on or after January 1, 2022, for any business income not allowed as a deduction under current law, this act reduces the amount of such non-deductible income that shall be included in the taxpayer's Missouri adjusted gross income, as described in the act. (Section 143.022)

Additionally, for all tax years beginning on or after January 1, 2022, this act reduces the corporate income tax rate on a portion of the income of corporations that begin operations in the state on or after January 1, 2022. Such reduction begins with a rate of 0% on the first $250,000 of income earned in the first tax year of the new corporation, and increases to a rate of 3% on the first $1 million of income earned in the fourth tax year of the new corporation. Thereafter, all income shall be taxed at a rate of 4%. (Section 143.071)

COVENANT NOT TO COMPETE

This act voids any covenant not to compete, as defined in the act, created after August 28, 2021, if an employee or prospective employee receives $75,000 or less in income from such employer or prospective employer, or the employee is employed by an employer working on a contract with the U.S. Department of Defense. (Section 431.203)

This provision is substantially similar to SB 77 (2021) and to a provision contained in SB 578 (2021).

MISSOURI WORKS PROGRAM

Current law excludes store front consumer-based retail trade establishments from the definition of "qualified company" for the purposes of receiving benefits under the Missouri Works program. This act allows such establishments located in a third or fourth class county to be included in such definition. (Section 620.2005)

This provision is identical to HB 1061 (2021) and to a provision contained in HCS/HB 555 (2021).

DEPARTMENT OF ECONOMIC DEVELOPMENT

This act creates the "Office of Entrepreneurship" within the Department of Economic Development. Such office shall employ an individual to promote policies and initiatives to support the growth of entrepreneurship in the state. (Section 620.3800)

This provision is substantially similar to a provision contained in SB 578 (2021).

JOSH NORBERG


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