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The Lake News Online
  • EEZs no longer needed

  • With the consolidation of the state's economic development programs, local jurisdictions that were considering trying to establish enhanced enterprise zones (EEZ) will not need to do so in order to offer incentives to businesses for job growth.
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  • With the consolidation of the state's economic development programs, local jurisdictions that were considering trying to establish enhanced enterprise zones (EEZ) will not need to do so in order to offer incentives to businesses for job growth.
    The Camden County Commission had considered possible EEZs in the Sunrise Beach, Linn Creek and Macks Creek areas earlier in the year. An EEZ already exists in Morgan County.
    EEZ's are specified geographic areas designated by local governments and certified by the Department of Economic Development that provide certain tax incentives to new or expanding businesses. Designation is based on demographic criteria, the potential to create sustainable jobs and local impact.
    Existing EEZs have been folded into the new program with slightly lower criteria than other levels within the overall program.
    On Aug. 28, House Bills 184 and 196 went into effect, establishing the Missouri Works Program which consolidates four of Missouri's existing business development incentives. The program provides a uniform set of definitions and a streamlined process.
    "Missouri Works consolidates and modernizes Missouri's economic incentives into a single, business-friendly program," Gov. Jay Nixon said in a recent press release on the issue. "Making these programs easier to use, and easier to understand, will allow businesses to focus on creating jobs, instead of cutting through red tape."
    Instead, under Missouri Works, certain types of new or expanding businesses anywhere in the state meeting minimum criteria would be eligible for tax incentives through retention of withholding taxes on new jobs and refundable income and financial institutions tax credits.
    There are five program types under the Missouri Works umbrella, each with their own criteria.
    For the smaller level programs, the benefit is the retention of the state withholding tax on the new jobs. At the Mega Works levels, the benefit is a percentage of the new payroll - 6 percent under Mega Works 120 and 7 percent under Mega Works 140.
    The benefits are not provided until the minimum new job threshold is met and the company meets average wage and health insurance requirements. The benefit period under each program will last five years, or six years for existing Missouri companies that have been in operation in the state for at least 10 years.
    New jobs must be full time - 35 hours or more per week with the company paying 50 percent of health insurance. They must also be above the base employment of the company.
    The limit on tax credits being issued is $106 million for fiscal year 2014, $111 million for 2015 and $116 million for 2016 and forward. There is no annual limit on the retained withholding taxes.
    No significant, project-specific site work can have been done at the business site or any machinery or equipment purchased for the business prior to application with the Department of Economic Development to receive the benefits. Businesses can also not have publicly announced a new capital investment project at a facility before applying to be eligible.
    Page 2 of 2 - Upon receiving a proposal or application, the DED will confirm the eligibility of the business and establish base employment, reserve the estimated tax credits and set a two year deadline date by which the minimum thresholds for eligibility criteria must be met.
    Missouri Works also consolidates the state's workforce training programs into a single program with the intent of better targeting resources toward job placement and training for job seekers.
     
    Types of qualifying businesses
    • For-profit or non-profit businesses
    • Headquarters, administrative or research and development offices of otherwise excluded businesses that serve a multi-state area
    Not eligible
    • Gambling establishments, store front consumer-based retail trade establishments, food and drinking places, public utilities, educational services, religious organizations, public administration, ethanol distillation or production, biodiesel production or health care and social services
    • Businesses that are delinquent in payment of any nonprotested taxes or other payments
    • Businesses that have filed or have publicly announced intent to file for bankruptcy, unless certain requirements are met
     
    Eligibility criteria
    Zone Works - Must be located within an existing EEZ
    • Minimum new jobs: 2
    • Minimum new private capital investment: $100,000
    • Minimum average wage: 80 percent of county average wage
     
    Rural Works - Must be located in a rural county which excludes Boone, Buchanan, Clay, Greene, Jackson, St. Charles and St. Louis City and County
    • Minimum new jobs: 2
    • Minimum new private capital investment: $100,000
    • Minimum average wage: 90 percent of county average wage
     
    Statewide Works
    • Minimum new jobs: 10
    • Minimum average wage: 90 percent of county average wage
     
    Mega Works 120
    • Minimum new jobs: 100
    • Minimum average wage: 120 percent of county average wage
     
    Mega Works 140
    • Minimum new jobs: 100
    • Minimum average wage: 140 percent of county average wage
     

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