tax credits – Missouri House of Representatives Newsroom

House Votes to Stem Penalties when Tax Credits Meet Caps

Many Missourians are already not a fan of tax filing day, which came this week. As Representative Becky Laubinger (R-Park Hills) explains, some of them have been surprised with additional reasons to be aggravated, in past years.

*Representative Becky Laubinger (Photo: Tim Bommel, Missouri House Communications)*

“How much worse would it be if, after you file your taxes, feeling like you’ve paid it in full, and then you get hit with a penalty and interest? My bill deals with that penalty and interest for tax credits that the tax filer qualified for in every way.”

The issue Laubinger’s bill deals with is that when there are enough claims against a state tax credit for it to reach its annual cap, some claimants, even though they met all qualifications, will get a bill from the Department of Revenue for the amount they claimed, plus interest and penalties. This is in spite of the fact that there is no way for them to know that cap would been reached.

House Bill 828, “would remove the penalties and interest for someone who qualified for a tax credit but the state hit the cap. They would still have to pay their taxes in full within 60 days or they would receive penalties and interest,” Laubinger told her colleagues.

Those bills from the Department of Revenue put some Missourians off claiming tax credits, many of which benefit benevolent organizations such as food banks, children’s crisis centers, domestic violence shelters, and other charities that serve those most at need in their communities.

“It discourages neighbors helping neighbors, it discourages people from giving to their local organizations, and often even gives a bad reputation in the community for those help organizations,” said Laubinger.

Arnold representative Phil Amato (R) for many years was the president of his local food pantry. He has sponsored similar legislation, having experienced firsthand what happens when these bills are sent out.

“Sometimes it takes you two to three years to talk somebody that has the wherewithal to write a check, and you tell them that it’s a 50 percent tax credit, that they’re going to get half their money back, and then they get a letter from the Department of Revenue that some of their donation has been disqualified, and then adding insult to injury is they’re charging them penalty and interest,” Amato explained. “Then the person is really upset because you’ve convinced them, ‘It’ll make you feel good to write this check to the local food pantry and help people that are hungry.’”

Laubinger’s bill enjoys broad bipartisan support, with no votes being cast against it as went through two House committees and was advanced to the Senate, 151-0.

*Representative Del Taylor (Photo: Tim Bommel, Missouri House Communications)*

Representative Del Taylor (D-St. Louis), the top Democrat on the House’s Ways and Means committee, through which the legislation was passed, urged those in his party to support the proposal.

“Fundamentally, if you made charitable donations and that donation’s tax credits were oversubscribed, you don’t necessarily get the full discount on your taxes, and what the lady is doing here is saying, ‘You didn’t get the full discount on your taxes, but you shouldn’t also be subject to penalties and interest.”

Amato said he would like to know whether the state is even making back the money that it spends on collecting these taxes and penalties.

“The Department of Revenue has to figure out they’ve exceeded the cap, then somebody has to sit down and write the letter. I bet you we’d be shocked at how much that letter costs, leaving the Department of Revenue and getting it to its end result, and then if it’s somebody who’s never got one before, then there’s letters going back and forth, then the person’s making a phone call to the Department of Revenue.”

“This thing is an expensive bookkeeping error for the Department of Revenue to do, so we need to get this thing wiped out,” Amato said.

*Representative Kemp Strickler (Photo: Tim Bommel, Missouri House Communications)*

It’s now up to the state’s Senate to consider Laubinger’s proposal, but the House will have another chance to act. The Senate version of her bill is awaiting action in a House committee.

Either way, Representative Kemp Strickler (D-Lee’s Summit) is one of the many who hopes it will reach the desk of Governor Mike Kehoe (R).

“This is such a good bill. We should not be penalizing folks who are doing their best to give to charitable groups and then, because the cap has been hit because people like it so much, we should not be charging interest and penalties on this.”

Other provisions in the bill would add to the income tax deduction for the sale or lease of farmland to beginning farmers a definition of “taxpayer;” and would stipulate that filing day for Missouri taxes must always coincide with the federal tax filing day.

House bill would increase cap on popular food pantry tax credit

House members are being asked to increase the cap on a successful benevolent tax credit that supports organizations that help the state’s homeless population. The sponsor says donors who apply after that cap is reached are being penalized.

*Representative Phil Amato (Photo: Tim Bommel, Missouri House Communications)*

Representative Phil Amato (R-Arnold) is the volunteer President of the Board for a food pantry in Arnold, and he said organizations like that one have benefitted greatly from the food pantry tax credit.

“It has worked so well it has exceeded its cap,” Amato told the Special Committee on Public Policy.

This tax credit has been in existence since 2013. It allows Missouri taxpayers who make donations to food pantries, soup kitchens, or homeless shelters to deduct an amount equal to half that donation from their state taxes.

The program is capped at $1.75 million. Amato said in the last few years Missourians have been donating enough to reach that cap. What happens to donors after that, he said, is alarming.

“The donor gets a letter from the Department of Revenue that says we’re disallowing some of your tax credit and you need to make a remittance for the amount of money that we’re disallowing, and you owe us penalty and interest, on a donation,” Amato said. “When I tell that to people around the House, they’re shocked.”

His House Bill 1730 would increase the cap to $3 million annually. It would also extend its expiration date from the end of 2026 to the end of 2030.

Committee member Mark Sharp (D-Kansas City) was one of those who expressed support for the expansion.

“We have a food pantry in my district called Community Assistance Council, and they provide food, clothes, really kind of a one-stop shop … it’s just really important that we try to support these organizations. They really are impactful to our communities,” Sharp said.

The committee voted in favor of the increase, 6-0.

House effort to offer more, and cheaper, child care advanced by committee

A proposal aimed at expanding child care in Missouri, which received broad House support last year, is among the earliest of bills to be approved by a House committee this year.

*Representative Brenda Shields (Photo: Tim Bommel, Missouri House Communications)*

Numerous supporters, including many from Missouri’s business organizations, testified at the hearing about what they say is a crisis facing the state’s employers and, therefore, the state as a whole.

“Perhaps the single greatest barrier to workforce participation today is the lack of child care resources,” said the chairman of the Workforce and Infrastructure Development Committee, Representative Louis Riggs (R-Hannibal).

Representative Brenda Shields’s (R-St. Joseph) House Bill 1488 would create three new tax credits, one of which is for employers who help fund child care for their employees, and one that is for providers who boost their employees’ salaries or improve their facilities.

“It addresses Missouri’s workforce crisis by addressing the root problem: the lack of affordable, quality, reliable, safe child care for working families,” Shields said.

Shields told the committee that 58 percent of businesses in Missouri report that child care is a barrier to recruiting employees, and 63 percent say it is a barrier to retaining employees. Parents says child care is often unavailable, and 43 percent of them say when it is, it is unaffordable.

She said her proposal would let communities respond to these issues in whatever ways best suit their needs.

“It is local businesses, churches, family homes, group homes who will create the child care that they need in their community,” Shields said.

Besides the economic issues, Shields said improving child care throughout Missouri would mean improving the lives of children in the state and offering stability to more of them.

“[Having] reliable people in a child’s life is important. We have to stop the revolving door of workers in our child care facilities.”

The proposed Child Care Contribution Tax Credit would be for up to 75 percent of a contribution used to improve a child care provider’s facility, equipment, or services, or to improve the salaries of a facilities’ staff. The Employer Provided Child Care Assistance Tax Credit would be for up to 30 percent of child care expenditures paid by an employer. The Child Care Providers Tax Credit would be for up to 30 percent of the cost of improvements made by providers, such as facility or service expansion or employee raises.

Each program would be capped at $200,000 per taxpayer, and $20 million overall, however an additional fifteen percent would be allowed in areas considered “child care deserts,” regions of the state with the most acute discrepancies between children in need of care and availabilities.

In testifying about the high price of child care, Kara Corches with the Missouri Chamber of Commerce and Industry said that care for her one child last year cost more than $21,000. Upon hearing this, Representative Travis Wilson (R-St. Charles) said, “That’s with one child, so if a family has two children, even if they got a multi-child discount at a child care provider, they could still be looking at, say, $30,000 a year. I think that kind of makes the case all on its own.”

Corches said providers are not to blame.

“Their margins are extremely narrow. It is very costly, if you think about liability insurance you have to have when you’re watching the lives of that many children, just supplies, etcetera, so it is a complicated situation where child care providers are struggling to make ends meet but they can’t just raise rates because then parents can’t afford it.”

One provider with three facilities in the Jefferson City area, Nicci Rexroat, told the committee, “We’re talking about middle class families with two kids who are paying $35,000 a year for early childhood [care]. We can’t raise our rates any more and our staff are still making well below what they deserve.”

“I know it was mentioned before that it’s the hope that we will reinvest in our employees, and for me and other child care providers it is the plan,” Rexroat said.

Emily van Schenkhof with The Missouri Children’s Trust Fund, which works to prevent child abuse, reminded the legislators that the issue isn’t just about the workforce and the economy.

“When families aren’t able to meet their basic needs, families become more stressed out. Whenever stress increases in families, bad things happen to kids, and so this child care crisis … is harming Missouri families and it’s harming Missouri children.”

“All children deserve to have access to safe, quality child care and that is something that we are not doing right now,” van Schenkhof said.

Shields told the committee Missouri can afford these tax credits.

“It is estimated that Missouri’s economy last year lost $1.35 billion because we didn’t have enough workers. If we collected the tax on those employees … that’d be $280-million,” Shields told her fellows.

She noted that when the state tries to get businesses to come here, it touts its location, its access to multiple modes of transportation, and its infrastructure, but businesses want to know that they will be able to find employees, and that those employees’ ability to work will be supported.

“I truly believe if we solve the child care crisis … businesses will flock to our state,” Shields said.

Last year’s version of Shields’ legislation was voted out of the House 133-20 but it stalled in the Senate. She hopes it will fare better this year.

“I think the time is now. I think it’s time that we do this for our parents and that we do this for our businesses. We can’t continue to kick this can down the road.”

The committee this week voted 10-0 to advance Shields’ bill.

Tax Credit Legislation Expected to Bring More Film Productions, Concerts to Missouri

More television, movie, and concert productions could be coming to Missouri after the legislature approved tax credits targeting the entertainment industry.

*Representative Michael O’Donnell (Photo: Tim Bommel, Missouri House Communications)*

The “Show MO Act” created credits for up to 30 percent of qualifying expenses for live entertainment and tour expenses, if certain conditions are met. It created credits equaling 20 percent of qualifying film production expenses, with additional credits available if more conditions are met.

Senate Bill 94 had broad bipartisan support on its way through the House and Senate, and was signed into law by the governor last month.

Representative Michael O’Donnell (R-St. Louis) said with tax credits, the first consideration is always whether they are fiscally responsible.

“I always wonder do we really get our money’s worth, and I feel like there was so much built into this one that I felt like the answer to that question was yes,” said O’Donnell.

“We really worked hard to try to make it as conservative as possible while at the same time leveling the playing field so Missouri can compete with other states,” said Cape Fair Republican Brad Hudson regarding the concert portion of SB 94. “These kinds of concerts could be held in numerous different places within our state, and we’ve seen when a big name entertainer comes to town, the kind of revenue that that generates for a community is definitely notable, and I expect that we will see more of that after this legislation takes effect.”

For an artist to qualify for the credits they must perform at least two concerts in the State of Missouri.

*Representative Brad Hudson (Photo: Tim Bommel, Missouri House Communications)*

The only other state that offers tax credits to concert productions is Pennsylvania, which recently increased the cap on its credits due to their success. Hudson said due to geography alone, Missouri could fare even better.

“I am confident that this great state that we all know and love, when we can compete with other states we will win every day of the week because of where we’re located in the country, because of the people that we have here, and the resources that we have.”

O’Donnell said Missourians could also get more opportunities to see their favorite artists.

“They get a shot at seeing some entertainer that they wouldn’t otherwise see, who are in a lot of cases going to be doing one show on one side of the state and one on the other.”

The state’s previous film tax credit program expired in 2013. Since then the state has hosted little in the way of television and motion picture filming, while some major projects – even ones set in Missouri – have gone elsewhere. The new law puts Missouri among 39 states that offer film incentives.

Representative Steve Butz (D-St. Louis) has a brother in the film and live theater industry, who this past spring moved to Georgia to film a movie that might otherwise have been filmed in Missouri.

“He, just as an actor, said hey, you know that Georgia has these film tax credits and the film industry has exploded in Georgia even to the point that Ozark, the show that was a huge success and was meant to be filmed, and it certainly is about, the Missouri Ozark region, was filmed in Georgia, as was this movie that my brother just filmed. He said it absolutely is attracting and creating a film industry,” said Butz. “He said Missouri is losing out on this. You don’t have hardly any TV shows filmed there, you don’t have movie sets coming there. They might use a few shots like to simulate something from the Midwest, or if it has to do with St. Louis or Lambert Airport or something, but they’re not actually moving the sets and the crews there.”

*Representative Steve Butz (Photo: Tim Bommel, Missouri House Communications)*

The benefits of having things filmed in Missouri aren’t just financial. There’s a boost to the very morale of communities, and that often spans generations.

“There’s the hard to measure benefit of civic pride when a major movie comes to town. The stars stay at your hotels, they’re seen publicly, your local people get to be the extras in the movie, and it just brings a lot of excitement.”

The film tax credits are capped at $16-million dollars. In addition to the 20 percent credit for qualifying film productions, another 5 percent can be earned if at least 15 percent of production takes place in a rural or blighted area; another 5 percent can be earned if a certain number of Missourians are hired; and another 5 percent is available if the production depicts Missouri or the region in a positive light. The Department of Economic Development will decide which productions are approved.

“It’s good for business, it’s good for the industry, it’s good for civic pride, and there is a solid return on the dollar,” said Butz.

As with all tax credits, these will be reviewed annually by the legislature to ensure that they are benefitting Missouri. As O’Donnell put it, “What’s the return on investment? The state’s taxpayers are making an investment. What are they getting back? I think in this case we’re going to find ourselves very positive.”

The legislation becomes effective August 28. The new tax credits would expire in 2030 unless a future legislature and governor agree to extend them.

Expansion of adoption tax credit sent to governor

Missouri legislators hope one of the bills they’ve sent to the governor will lead to more children being adopted into loving homes.

*Representative Hannah Kelly (Photo: Tim Bommel, Missouri House Communications)*

One of the provisions in Senate Bill 24 would expand Missouri’s adoption tax credit, which offers a nonrefundable tax credit for one-time adoption-related expenses such as attorney fees, up to $10,000 per child. That credit is capped at $6-million a year. SB 24 would remove that cap, makes the tax credit refundable, and would have the per-child limit adjust with inflation.

Those proposed changes are now awaiting action by Governor Mike Parson (R), and their House sponsor, Hannah Kelly (R-Mountain Grove), couldn’t be happier.

“I just think we did something really good today. I honestly had given up on it and then it passed. I couldn’t hardly believe it. Now it’s on the governor’s desk. I’m very thankful,” said Kelly. “We’re just saying, ‘Hey, we’re here to make sure that we invest in these kids and these families, help them get across the line, get them out of the system, get them building their futures together as a family.’”

More than 2,200 Missouri children are awaiting adoption. Representative Keri Ingle (D-Lee’s Summit) once worked as an adoption specialist with the state Children’s Division, and said most of the families who would adopt those children see the system as complicated and laced with prohibitive expenses.

“They know it costs a lot of money, they know it’s hard, they know that they have to jump through a lot of bureaucratic hurdles, but they don’t know that there’s support on the other end of it. They don’t know that they’ll be eligible, perhaps, for a subsidy and tax credits and things like that, that will help them complete their family and get kids out of foster care and make it affordable and not cost prohibitive.”

Ingle said this bill could make a huge difference.

“We have kids that linger in care indefinitely and unnecessarily, because there are so many families out there that want to adopt kids, that want to create forever homes for these kids, but they just feel like it’s beyond their fiscal ability to do so. Anything we can do to help them through that process and create that forever family and get these kids out of [state] care … there are way too many people that would love to expand their families and adopt.”

The bill is especially personal for Kelly, who talks often to her colleagues and in public settings about her own experience adopting her then-teenage daughter.

“My daughter is building her own life and celebrating her impending wedding coming soon and going to college and doing all the things that you hope to see your children do, not because of me but because she simply had the opportunity to know she had a forever home base to come back to. To be a part of that is a privilege and to get to be a part of helping Missouri families provide that for children who otherwise would not have that, is a privilege.”

*Representative Keri Ingle (Photo: Tim Bommel, Missouri House Communications)*

Ingle said even as other issues have caused tension between her party and Republicans there has been a lot of cooperation on issues like this one, and she’s been glad to be a part of it.

“We’ve been really, really lucky to have a specific group of people in my tenure that have really placed children and child welfare at the forefront of what we work on and placed partisan ship at the very, very back when it comes to those things. Politics has nothing to do with child welfare and it shouldn’t have anything to do with that. We should all come together and do what’s right for the kids of this state, and so I’m always really proud to see the work that my colleagues do, on both sides of the aisle, when it pertains to that.”

Kelly added, “If any Missouri family wants to give a child who does not have a forever home a home we need to back up and support them, and that is what this credit is about.”

The House’s final vote on SB 24 was 139-5. It now awaits the governor’s decision to either sign it into law, veto it, or allow it to become law without his action.

Legislature votes to incent film productions, touring musicians to come to Missouri

With the third piece of statutory legislation to reach the governor this year the legislature tries to bring more entertainment industry projects and the dollars that come with them to Missouri.

*Representative Kurtis Gregory (Photo: Tim Bommel, Missouri House Communications)*

House lawmakers have for years bemoaned the fact that major motion picture and television productions bypass the Show-Me State for states with better incentive packages – even productions that are set in Missouri.

Senate Bill 94 would establish tax credits for film projects starting at 20-percent of specified costs, with opportunities for additional credits as other criteria are met.

Dubbed the “Show MO Act,” House handler Kurtis Gregory (R-Marshall) said the program is well thought out.

“Investments have to be made inside the state before the credits are handed out,” said Gregory. “The Department of Economic Development will kind of have the final say in whether or not the credit goes out if it meets the program.”

Improved film tax credits have been considered by Missouri legislators for years. They often noted that when the 2014 movie Gone Girl was filmed in Missouri it brought $7.8-million to the state while hiring more than 110 Missourians and more than one thousand more appeared as extras.

More often, however, other states have won out on productions of stories that take place in Missouri because they have better incentive packages. The Netflix series Ozark, even though it unfolded around the Lake of the Ozarks, was filmed in Georgia. Even scenes taking place in the Missouri Capitol were filmed in Georgia’s capitol.

Gregory told colleagues, “When film producers call the State of Missouri, call the state film office to say ‘We want to film this movie here,’ and they ask the next question, ‘What’s the incentive program in Missouri look like?” and when our film office has to then say, ‘We’ve got really great locations,’ because they can’t answer the question on whether or not there’s incentives in Missouri, there’s great business leaving this state.”

SB 94 would allow film productions additional credits when at least half of filming is done in Missouri; at least 15-percent takes place in rural or blighted areas; at least three of a project’s departments hire a Missourian ready to advance in their field; or the project positively portrays the state or something in it.

The bill also aims to bring more music industry dollars to the state by authorizing credits for rehearsal and tour expenses for live tours and associated rehearsals.

Legislators laid out limits for these credits as well, as Gregory explained. “There must be at least $1-million spent with Missouri music vendors, they’ve got to rehearse in a qualified facility for a minimum of ten days, they also have to then do two concerts within the State of Missouri.”

Those credits would be for 30-percent of tour or rehearsal expenses, capped at $1-million if expenses are less than $4-million. No taxpayer could get a credit greater than $2-million for expenses between $4- and $8-million; nor greater than $3-million for expenses exceeding $8-million. Combined credits are limited to $8-million per fiscal year.

The film tax incentives would expire at the end of 2029 unless the legislature votes to extend them. The tour and rehearsal credits would expire at the end of 2030 unless extended.

The bill has broad bipartisan support, with lawmakers in both parties wanting to bring more entertainment industry proceeds to Missouri. Representative Steve Butz (D-St. Louis) said as has happened with other businesses, the tax credits might get this industry to come to Missouri only to later stay and stand on its own.

“Here’s another example where we take some help from government to prime that pump, got people willing to do business here,” said Butz.

“Both of these bills are well-needed. It’s going to drive industry and economic development to the state,” said Gregory.

The House voted 113-45 to send that legislation to Governor Mike Parson (R) for his consideration.

Local rehab centers would benefit from proposed new tax credit

A proposed new tax credit would give a boost to community-based drug treatment programs throughout the state. The plan’s sponsor says these programs do a lot of good and give back to their communities but some are facing financial challenges and she wants to see them get more support.

*Representative Cheri Toalson Reisch (Photo: Tim Bommel, Missouri House Communications)*

Under House Bill 2527 a taxpayer who makes a donation to a faith-based organization, peer- or community-based organization, or recovery or community center or outreach that offers addiction recovery services could claim a tax credit for an amount equal to half of that donation. Up to $2.5-million in tax credits could be awarded in one year, subject to the legislature appropriating the money for them.

Sponsor Cheri Toalson Reisch (R-Hallsville) says she has such rehab organizations in her district and she’s seen how they benefit individuals and the overall community.

“I see what [program participants] do on a daily basis. They get jobs. They help their communities out. We don’t want people to recidivate. We want them to be able to pay their child support, to pay their bills, and support themselves, so it’s a win-win.”

“I have Primrose Hill, which is part of Team Challenge, in my district. It helps women with babies and children to get over addictions. I also have In2Action that helps people with addiction and recovery and felons coming out of prison,” said Toalson Reisch. “If you’d have heard the testimony [from program participants] from a year ago, I was bawling my eyes out. This is that important to people.”

Toalson Reisch said some of these programs are struggling, and others are looking to expand. She said in either case, this legislation could give them the help they need and thereby help more Missourians.

“Especially, I think, during COVID and a lot of stressful times in their lives [some Missourians] need this help and to know that a resource is there for them locally that they can utilize and be put into a program and help them overcome their addictions.”

Mission Gate Prison Ministry works with more than 300 men, women, and families each hear. Program Director Stephen Hunt told the House Committee on Ways and Means this bill would encourage more contributions to his organization.

“We support this bill because two-thirds of our annual budget is funded by private donations,” said Hunt.

Stan Archie, the Clinical Director of Footprints, Inc. in Kansas City said this bill would also give every Missourian the chance to be a part of someone’s recovery.

“It invites people who can’t get out on the street to be a prat of the solution, and at the same time it also encourages dollars to come into the places where we can demonstrate an effective program,” said Archie.

David Stoecker, Executive Director of the Springfield Recovery Community Center, told lawmakers these recovery programs save the state money.

“It’s over a $20 return for every dollar spent on recovery support, so that $2.5-million equates to the state saving $50-million a year, which to me is a complete no-brainer,” said Stoecker.

Toalson Reisch filed this proposal last year but late in the session, so it only cleared one committee. With it getting traction earlier this year she is optimistic it can become law. The Ways and Means committee approved HB 2527, sending it on to another committee.

She proposes that these tax credits be offered for six years, at which time they would expire unless renewed by the legislature.

House Committee advances foster care, adoption supports

A House Committee has voted to make adopting or fostering children in Missouri easier, with its support for two bills that are early-session priorities for chamber leadership.

The House Committee on Children and Families unanimously passed House Bill 429, which would authorize an income tax deduction for foster care expenses; and House Bill 430 which would expand the state’s existing $10,000 tax credit for the adoption of children with special needs to any adoption.

Representative Hannah Kelly (photo: Ben Peters, Missouri House Communications)

The bills’ sponsor, Representative Hannah Kelly (R-Mountain Grove), said both proposals have been stalled in past years but are priorities of House Speaker Rob Vescovo (R-Arnold).

“Because of Speaker Vescovo’s leadership we are looking at sending this thing to the House floor, sending it to the Senate right away, and it’s just awesome,” said Kelly. “Today doesn’t have anything to do with Hannah Kelly, it has to do with Speaker Vescovo’s leadership and people who have gone on before me and plowed the ground.”

The proposed tax deduction for foster care would begin January 1 and continue for six years unless extended by the legislature. Parents who foster children for at least six months would be eligible for a deduction of up to $2,500, or $5,000 for a couple filing jointly.

Those who foster for fewer than six months could apply for a prorated deduction. Kelly said extending help to those foster parents is no less important.

“Sometimes children need a safe place for just a few weeks while mom and dad get a house cleaned, or while they take certain trainings, or perhaps they simply need a temporary place to stay while they find a permanent placement, and so this also allows to be supportive to the foster parents who provide that respite care, that temporary place,” said Kelly.

Kelly said anything that makes it easier for a child in foster care to be adopted isn’t just good for that child, it makes financial sense for the state.

In the case of her own daughter, who she adopted last year at the age of 18, “If she would have stayed in the system she would have stayed there until she was 21 … from a financial standpoint … the state would’ve spent $21,000 just as a base amount, before she aged out of the system.”

Vescovo, who was adopted out of foster care, called on House members last week to join him in expanding the adoption tax credit.

Missouri House Speaker Rob Vescovo (photo: Ben Peters, Missouri House Communications)

“Together we can make adoption a possibility for many families who may not have the money but have the love and support to give a wonderful life to a person in need.”

He also asked for members’ support for foster care reforms, including a tax deduction, “which can encourage more Missouri families to open their doors and their hearts to our young people in need.”

“We know we have more than 13,000 kids in the foster care system and more enter the system every year. We must take every step possible to give each and every one of these kids an open door of opportunity so they can grow into healthy, productive adults,” said Vescovo.

With the committee’s action today, those bills will go before another committee and could be heard by the full House next week.

House debates reinstating tax credits for shows, movies shot in Missouri

Missouri lawmakers are debating whether the amount of money that comes into the state when movies and TV shows are filmed here is enough to merit giving producers a tax break in return.

Representative Kathy Swan (photo: Tim Bommel, Missouri House Communications)

Cape Girardeau representative Kathy Swan (R) says it is. She’s proposing in House Bill 923 that the tax credit for production of film projects in Missouri be reinstated. It was eliminated in November, 2013.

Swan’s district is where the major motion picture Gone Girl, starring Ben Affleck, was filmed in 2013. She says one need look no further than how that benefited her region to see these credits are worthwhile.

“With a $7.9-million boost to the regional economy of Cape Girardeau … the state redeemed $2.3-million in tax credits, generating a net of $4.7-million in economic activity in the State of Missouri,” Swan said. “116 Missouri crew members were hired, 1,400 local extras, 7,000 hotel room nights paid for and secured, cars rented, set supplies, office supplies were all purchased from local businesses, and food was catered for workers. In addition, university students had the opportunity to apprentice alongside professionals.”

Swan said since the film tax credits were allowed to expire the state has missed out on more than 10 projects that could’ve carried more than $150-million of economic impact. That includes projects that are set in Missouri, such as the Netflix series Ozark, starring Jason Bateman.

That series, a dark drama about drug money laundering that has been renewed for a third season, is set around the Lake of the Ozarks, yet is mostly shot in Georgia.

That frustrates Lake Ozark Republican Rocky Miller.

“The Ozarks happen to be in Missouri … they are not in Georgia,” said Miller. “The beautiful Lake of the Ozarks doesn’t have a whole lot of pine trees, nor a muddy bottom, nor a lack of fun stuff that goes on in the Ozarks, and I know for a fact that if it were not for the lack of this film credit we would have greater exposure for the actual, beautiful, bluff-laden Lake of the Ozarks rather than the pine tree surrounded lake from somewhere in Georgia.”

Miller said for a series like Ozark to have filmed at a site already so popular with tourists such as the Lake of the Ozarks would have brought tourism dollars to Missouri for years to come, exceeding the $150-million impact Swan referenced.

Not everyone is sold on the proposal. St. Louis Republican Jim Murphy said to vote for this bill would be a “vote for shiny objects.”

Representative Jim Murphy (photo: Tim Bommel, Missouri House Communications)

“What we’re talking about here is spending $45-million over the next ten years, or $4.5-million next year for a shiny object – to bring in a [transient] film crew to film a film just to make us feel good,” said Murphy. “Would that $4.5-million be better spent bringing a factory here that year after year will employ Missourians? That’s what tax credits are for. Not for shiny objects.”

Amendments to the bill would require applicants for the film tax credit to disclose any political contributions in excess of $25 made to a Missouri candidate or party; allow municipalities where a project is being filmed to offer a local one-percent tax credit that would trigger a greater tax credit from the state; and require a film receiving the credit to include a logo and statement in its credits indicating it was shot in Missouri.

Another favorable vote would send Swan’s proposal to the Senate.

House budget committee names first target in tax credit reform: wine & grape producers tax credit

The House Budget Committee has taken the first step in what could be a longer, broader process of tax credit reform.

Representative Justin Alferman (photo; Tim Bommel, Missouri House Communications)

The committee must annually clear state agencies to authorize tax credits. When it met this year, it recommended that issuance of the wine & grape producers tax credit not be continued.

Vice-chairman Justin Alferman (R-Hermann) described the decision as a “test run,” because some believe that when the legislature chooses to end a tax credit, it will likely be sued by someone who wants to get the involved credits.

“What does happen? We’re going to eliminate this. If a year goes by and we say, ‘Look, we eliminated this one and everyone respected the legislature and their choice here,’ then maybe we can start going after some of these bigger ones like low-income housing, like historic tax credits; some of the ones that are causing the biggest strain on our budget,” said Alferman.

The wine & grape producers tax credit offers a break on income taxes equal to part of the purchase price for equipment used in making wine or growing grapes. In each of the past two years between $14,000 and $17,000 worth of the credits have been issued, and more than $14,700 was waiting to be redeemed at the end of Fiscal Year 2016. More than $575-million was redeemed across all tax credits in Fiscal Year 2016.

Alferman, whose district includes numerous wineries, said it is an important credit to eliminate.

“It is a great example of a tax credit that has worked but has long outlived its usefulness in our state,” said Alferman. “I believe all tax credits should have a sunset … regardless of if it’s doing good things for our state or if they are simply pork barrel spending, which I believe a lot of them are nothing more than pork barrel spending.”

Alferman said the credit was created to help build the state’s wine industry, and that’s been done. He said now there are people using the credit but creating subpar wines that hurt the industry as a whole, or using imported juice or grapes that would not grow here yet labeling the products as Missouri wines.

He hopes after this the legislature can proceed with more reform of tax credits, which he said have “run rampant.”

“Representative [Don] Rone did a great job of going through and analyzing along with our budget staff. We have over $1.5-billion – with a ‘B’ – of tax credits that have been issued but have not been redeemed. Well what would happen if those all got redeemed in one year? We get just under $10-billion of general revenue taxes in the State of Missouri every year. If those all, for whatever reason, got redeemed in one year, that’s 10-percent of all of our state revenue for GR. That would devastate the state,” said Alferman.

Meanwhile, Governor Eric Greitens (R) created a committee to look at the state’s tax system, including tax credits, and recommend changes. Alferman is hopeful the legislature will be able to work toward tax credit reform along with that committee.