Enterprise Zone Tax Incentives are targeted geographically and include the State Enterprise Zone area and the Federal Enterprise Community Area (see attached map). State incentives include credits and exemptions from State Corporate Tax. The threshold to qualify for benefits is the creation of at least 2 new jobs and a capital investment of at least $100,000. State incentives include: job credits, investment tax credits, and a 50% exemption. Not all businesses are eligible to receive Enterprise Zone Tax Benefits. Those businesses targeted by this State program include:

Manufacturers Poultry Egg Producers Retailers Insurance Carriers Farm Implement Retailers Recycling Operators Health Services Leasing Residential Properties (low and moderate income) Commercial Banks and Savings Institutions. Photofinishing laboratory activities (SIC 7384) and microfilm recording/developing services (SIC 7389) employing 100 or more employees.

Railroad, Motor Freights and Barge Terminals Wholesale Distributors Commercial Research and Development Services Interchange Telecommunication Services Mining Employment Agencies Computer Programming/Data Processing Services Office activities limited to Headquarters, Telemarketing, Insurance Companies, Passenger Transportation Ticketing Systems, Credit Card Processing Centers.

JOB CREDITS

A qualifying business (those companies meeting the criteria of job creation and capital investment) are eligible for at least a $400 per employee tax credit for each new hire or employer relocated to the zone facility from out of state. That benefit is doubled to $800 per employee if the new hire is either a zone resident or a displaced worker (unemployed prior to accepting the job) and triples to $1,200 if the new hire is both a resident of the zone and a displaced worker. The job credit has the ability to last up to 10 years.

Assistance beyond the job credit must be earned by the company by proactively hiring. In order to receive benefits from Enterprise Zone Investment Tax Credit and 50% exemption; a company must achieve 30% of their new hires from the pool of Enterprise Zone residents and displaced workers. Any existing employee of the company residing in the Enterprise Zone can count toward the 30% requirement.

INVESTMENT TAX CREDIT

A 10 year credit computed based upon a formula which provides 10% of the first $10,000 in capital investment, 5% of the next $90,000 and 2% on investments in excess of $100,000. A new lease is calculated at 8 times the annual lease payment for the purposes of a calculating capital investment. Note that the State requires the new investment calculation to deduct the value of the former facility in determining investment. For example: A company sells a building with a value of $100,000 and replaces the facility with a building in the Enterprise Zone valued at $200,000. So, total value of the new investment minus the value of the replaced facility would mean an investment of $100,000 for Enterprise Zone purposes.

50% EXEMPTION

Companies making qualified investments also qualify for a 50% exemption from state corporate income tax on the revenue growth of an existing business, or a total 50% exemption for a business new to the State of Missouri.

Example

A company making a qualified zone investment has revenues increase from one million to two million. If the company has only one location it will receive a 50% exemption from state corporate income tax on the one million in incremental growth.

For companies with multiple locations (some outside the zone) making a qualified zone investment, the formula to determine their benefit is as follows;

Credits are claimed through the annual state corporate tax filing. The program is attractive to larger companies with significant state tax liabilities, but also is applicable to small companies, even those that are not currently profitable, because the state will buy back (refund) unused credits up to $75,000 over the first three years. Effective January 1, 1999 the State requires companies anticipating using Enterprise Zone benefits to file a letter of intent with the State 15 days prior to commencing operations at the expanded or allocated facility.

PERSONAL PROPERTY TAX INCENTIVE