Fall 2006 issue of Horizons

INDUSTRY ARCHITECTS & ENGINEERS Incentives to Expand in Missouri for Architecture and Engineering Firms

Mark Jansen, CPA Jackie Jacquin, CPA

Architecture and engineering firms are preferred businesses for two of Missouri's tax credit incen- tive programs.

the health insurance premium of a single employee's cover- age. Special rules apply when the employer uses a self- insurance program. To qualify, the company must create a minimum number of new jobs at the project facility prior to the “deadline” date, based on the type of project. Architecture and engineering firms are classified as technol- ogy businesses. They need to add 10 or more new jobs with- in two years of the date of the DED proposal. A company must apply to be accepted into the program before the employment gains occur. Program Benefits - The benefits of the program are: (a) the retention of the state withholding tax of the new jobs and (b) state tax credits, which are refundable and/or salable. The program benefits are based on a percentage of the gross payroll of the new jobs. The benefit percentage starts at 5 percent and can increase by another percentage point or two. The program benefits are not provided until the mini- mum new job threshold is met and the company meets the average wage and health insurance requirements. The employer earns this benefit for five years. For example, 10 new employees who have an average salary of $50,000 would create a $25,000 benefit each year for five years or $125,000 for the total time period.

Both require businesses to be in an expansion mode. If the fact pattern is correct, both programs can add to your bottom line without changing your business operations. The Missouri Quality Jobs Program is a newer incentive program, while the Missouri Rebuilding Communities Program has been around for a number of years.

Missouri Quality Jobs Program

Eligible Businesses - This program is available to business- es located in Missouri, except for gambling, retail trade, food and drinking establishments; companies regulated by the Public Service Commission; companies that are delinquent in non-protested taxes or other payments (state, federal or local); any company that has filed for or has publicly announced its intention to file for bankruptcy; public entities or religious entities. The average wage of the new jobs must equal or exceed the county average wage (as published by the Department of Economic Development), and the compa- ny must offer health insurance and pay at least 50 percent of

31 • summer 2006 issue