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Study finds Missouri's business tax burden below average

Study finds Missouri's business tax burden below average

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General Motors president Mark Reuss speaks during a press conference held at the Wentzville Assembly and Stamping plant on Friday, Dec. 13, 2019 to announce GM's plan to invest $1.5 billion to bring its next generation of midsize pick up trucks to market. Photo by Troy Stolt,

Missouri's business tax burden is below average overall and especially attractive for startup manufacturers, a new Tax Foundation study finds.

The study, done with accounting firm KPMG, calculates the total tax burden for eight different types of business, from corporate headquarters to data centers to manufacturers. It includes sales, property and unemployment taxes in addition to corporate income taxes.

Missouri has the 18th-lowest tax burden for mature firms, but jumps to 10th place for new firms. For a new, labor-intensive manufacturer, the state's incentive programs vault it to the No. 4 spot.

Missouri's worst ranking is for mature corporate headquarters, where it ranks 34th. The study notes that an above-average sales tax rate offsets some of the benefit of the state's relatively low corporate income tax.

Illinois ranks in the bottom third of states for most types of mature firms, including a ranking of 50th for technology centers. Illinois' best performance is seventh place for a new shared services center, which could benefit from a relatively generous withholding tax credit.

While it takes incentives into account for new companies, the study says they "are rarely a substitute for a competitive, structurally sound tax system."

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