Starting a Business in Missouri
Running a business in Missouri can be quite challenging, but there are many upsides that can help things along. Missouri has many advantages for starting a business, and for companies that want to expand their operations and grow from within the state. It has a very loose regulatory environment that is complemented with a reasonable tax structure. It also has a lower than average cost of living compared to many other states, as well as communities who help and support their local businesses through programs and incentives. Some common incentives come in the form of tax credits, grant/loan programs and exemptions. There are some other procedures that should be done first before looking into programs. Having accurate information is very important if you are getting a business license, obtaining a FEIN, filling out form 2643A, or looking up a Missouri sales tax rate.
STEPS TO STARTING A BUSINESS IN MISSOURIAfter you have completed a corporation search, chosen a company name, and setup an entity with the Missouri Secretary of State, you could register online for a Missouri Seller’s Permit with your company information. Another main consideration for becoming and remaining compliant with the state is to see which Business Licenses you need. What you need will depend on many factors including the type of industry you are in, what your business does, and where your company is located. The Missouri Department of Revenue lets you know which products and services are taxable. When you are done with all legal and administrative tasks you can see which incentives can be advantageous. Missouri companies can benefit from some great acceleration programs. Here is a brief list of the incentive programs awarded:
- Missouri offers workforce expansion programs designed to help a business with the formation of high quality jobs. The two most recognized programs are the Missouri Works Program and the Work Opportunity Tax Credit. The Missouri Works program is an employment tax credit that is offered to new employers that create new jobs or to existing employers to help them expand their operations by purchasing equipment. The Work Opportunity Tax Credit is actually a federal income tax credit offered to businesses that can train workers who are having difficulties with upward mobility by providing them with the skills and training needed for further development. These incentives can be applied to new hires as well as current employees. There is no cap on the available tax credits per year.
- A Missouri Sales Tax Exemption is available for businesses that purchase tangible personal property with chapter 100 bonds. Eligible companies include agricultural processing, R & D, warehousing, office, and distribution. Qualifying criteria include paying above average wages, being in an economically distressed area, being involved in competition with another state, and making sure the jurisdiction has approved the local exemption. There is also a separate exemption for manufacturers.
- In an effort to promote a cleaner environment, Missouri offers an Alternative Fuel Infrastructure Tax Credit. Any company that wants to use electrical cars and their charging stations can receive up to $20,000 in compensation. The costs must be directly related to the qualified alternative energy equipment and other recharging equipment.
- Missouri has a Sales and Use Tax Exemption for companies that have a qualified data center. A qualified data center is any newly built facility that a minimum of $25,000,000 is invested into or $5,000,000 to an existing facility. Additionally, a company with a new facility must create at least 10 new jobs paying at least 150% of the states average annual average wage and an existing facility must create at least 5 new jobs. If you do not qualify for the exemption, you will have to collect sales tax with your seller’s permit.