Sunsets on Horizon for Missouri Tax Credits
While there has been a lot of hype over the Missouri Tax Credit Reform during Governor Nixon’s most recent special session, many Missourians are left wondering how this will affect them.
Missouri tax credits began in 1973 with the Senior Citizen Property Tax Credits. These credits gave relief to senior citizens, disabled, and widowed individuals by reducing their state tax liability through credits for the property taxes they had paid. Today, there are 61 Missouri state tax credit programs that have been enacted to decrease the unemployment rate, boost development across the state, and to build strong communities.
With the current economy being stale, the state of Missouri along with many other states is looking to cut costs and reform budgets. In doing so, Governor Nixon implemented the Missouri Tax Credit Review Commission in July 2010. The review commission is made up of 27 business, community, and legislative leaders that will review the current tax credit programs to insure the state of Missouri is receiving the maximum return on its investment in the programs.
Upon review, the tax credit commission recommended the General Assembly impose sunset provisions on any remaining tax credit programs based on 2, 4, or 6 year sunsets. The proposed recommendation came out almost one year ago and there is still debating going on within the General Assembly. However, whether sunsets mean programs will go away is an open question. The way credits have been grouped around sunsets means the beneficiaries will forge alliances to save all the credits expiring at the same time.
The social welfare credits program has already began forging an alliance to protect the credits which include help for food pantries, domestic violence shelters and others. In all, 15 credits, many with limits of about $2 million a year, would expire in 2015 under the bill. The benefit for the taxpayer contributing to one of these programs is receiving Missouri Tax Credits equal to 50 percent of the contribution.
In essence, I think it is safe to say that while sunsets are on the horizon, Missouri Tax Credits are here to stay. There may be changes to ensure taxpayer dollars are being appropriated for the best return on investment, but the tax benefit from purchasing Missouri Tax Credits will still be available. If you would like to take advantage of available credits while there is still time, contact Anders to see if purchasing tax credits makes sense for you.