Incentives for Northern Missouri Business Re-location
State and Local Programs Available
*Please Note: These programs are available in the state of Missouri, but for some a separate application will need to be filed and approved before an official offer can be made. A note is next to each one.
State of Missouri Programs:
Grow Missouri Loan Fund: (*separate application)
o The purpose of the funding is to assist in the expansion of a project that would unlikely occur without the Grow Missouri Loan in order to create or retain full-time jobs for targeted businesses.
o Key Benefits: principal and interest payments may be deferred for up to 3 years. After the initial deferral period, payment may be interest only for up to 3 additional years. The maximum term of the loan is 8 years.
o The collateral may be subordinated to the primary lender.
o An approved applicant will have 120 days after DED’s approval of the loan application to secure commitments of the other financing for the expansion project; therefore, there is no need to have the entire project financing secured when applying.
o Interest rates are 2% fixed rate per annum. (MBE/WBE is 0% rate.)
o Generally, for-profit “primary” companies (that mostly sell/compete outside the local market area) are eligible.
o Applicants must demonstrate a reasonable ability to create at least 1 new or retained job for every $75,000 of Grow Missouri Loan funding within 5 years of approval. Such new or retained jobs must have average wages that are at least 80% of the county average wage, or 70% within Enhanced Enterprise Zones.
o The applicant must offer to pay at least 50% health insurance for all Missouri employees.
o The Grow Missouri funds and the other “leveraging sources of funds” (private loans and equity) to be used for the project may not be used for refinancing existing debt or replacing existing equity. There is no prohibition on the use of “non-leveraging sources” (direct public sector funding) for refinancing.
o None of the “leveraging sources of funds” can have been spent prior to the DED’s approval of an application.
o The expansion project does not involve relocating the project facility from another community in Missouri, or if so, the existing community has endorsed the relocation to DED. Also, this project does not, or will not, cause the reduction of employment at a related facility located in Missouri.
o The qualified company (including affiliates) must have less than 500 full-time employees (full-time equivalent basis) at all locations, inside or outside Missouri, at the time the application is submitted.
o The Grow Missouri Loan cannot exceed: (a) 10% of the total “leveraging sources of funds” (private loans and equity); (b) $3 million per qualified company; or (c) $75,000 per new and/or retained job, whichever of these would result in the lowest amount.
o Applications for the available funding of $10 million will be received at any time until the funding is exhausted.
o A qualified company approved for a Grow Missouri Loan must provide annual reports to DED. DED will provide additional information to the qualified company regarding the necessary reporting after the loan is approved.
· Enhanced Enterprise Zone Tax Credits: (*will come as a proposal directly from the state)
o The Enhanced Enterprise Zone Program is a discretionary program offering state tax credits, accompanied by local real property tax abatement, to Enhanced Business Enterprises. Tax credits may be provided each year for up to five tax years after the project commences operations.
o To receive tax credits for any of the years, the facility must create and maintain the minimum:
*New or expanded business facility – 2 new employees and $100,000 new investment;
*Replacement business facility – 2 new employees and $1,000,000 new investment
*Health insurance at all times, of which at least 50% is paid by the employer.
Eligible investment expenditures include the original cost of machinery, equipment, furniture, fixtures, land and building, and/or eight times the annual rental rate paid for the same. Inventory is not eligible.
PROGRAM BENEFITS/ELIGIBLE USES:
This tax credit can be applied to:
o Ch. 143 – Income tax, excluding withholding tax
Tax credits can only be applied to tax liability for the year in which they were earned. The tax credits are refundable; or may be transferred, sold or assigned. The sale price cannot be less than 75% of the par value of such tax credits.
Tax credits will be an amount authorized by DED, based on the state economic benefit, supported by the number of new jobs, wages and new capital investment that the project will create.
Tax credits issued under this program are limited to $24,000,000 annually, effective August 28, 2008.
o DED must first offer program benefits to the business in the form of a formal proposal. The company must return the accepted proposal within 90 days of the proposal date.
o The company must submit the Notice of Intent (NOI), (Application & guidelines, pages 7-9), and receive the Approval Letter before the start of construction, and/or purchase of machinery and equipment. NOIs will be accepted by DED at any time of the year and will be approved on an individual, case-by-case basis, based on compliance with all program criteria
Annual Application for Tax Credits
The facility must file the Annual Application for Tax Credits and supporting documents each year for calculation of the facility’s state tax benefits. See page 10 of the application for a list of requirements. The deadline for submitting the Annual Application for Tax Credits is during the tax period immediately after the tax period for which the credits are being requested.
SB 1099 Reporting
The “Tax Credit Accountability Act” reporting form must be submitted to DED by June 30 each year for three years following the year of the first issuance of tax credits.
· Job Training: (*will require separate paperwork once training needs have been identified by the company) Customized Training is available for businesses to help train their workers through skill training. Skill training may take place in a classroom setting, at the business’ facility or at one of more than 80 educational facilities throughout Missouri.
This program is administered by the Missouri Department of Economic Development’s Division of Workforce Development. (Remove, in cooperation with the Department of Elementary and Secondary Education.) Local educational agencies implement the program locally. Training may include technical or soft skills. Instruction may be provided by local educational agencies, vendor trainers or employees of the business involved.
o To be determined eligible for training assistance, the business must submit an “Employer Request for Training” application 30 days prior to hiring or incurring training costs. The appropriate local educational agency will assist with preparing and submitting the “Employer Request for Training” application on behalf of the business.
o Local educational agency contacts may be obtained through the Division of Workforce Development’s Customized Training Unit at (800) 877-8698 or e-mail at: firstname.lastname@example.org.
o Only Missouri residents who are full-time, permanent employees are eligible for this program. Full-time jobs are defined as those jobs averaging 35 hours per week or more. Funding is not available for contract or temporary employees. In addition, certain industries and occupations are not eligible for training assistance. Wage requirements must also be met to qualify for assistance.
*Please note—none of these programs come as
guarantees! The Kirksville City Council will have to approve the local incentives and most are based on job creation. All options may not be granted either—it is all at the City Council’s discretion based on the project.
· Enhanced Enterprise Zone: Adair County established an Enhanced Enterprise Zone in 2010 and included the NAICS code of Manufacturing as one of the qualified beneficiaries which automatically qualify for tax abatement. Eligible facilities will receive a fifty per cent (50%) property tax abatement on improvements to real property, not to include land or personal property for ten (10) years from assessment of improvements as long as at least two (2) new full-time employees are added and a minimum of $100,000 in new investment. An application will need to be filed prior to the end of the tax year for which the improvement was made in order to receive the abatement benefit.
· City Revolving Loan Fund: The City of Kirksville operates a revolving loan fund where loans are made to qualifying businesses whether wishing to expand current operations or to locate a new qualifying business to Kirksville. The loan is based upon a simple formula of up to $10,000 per job created as long as monies are available. The interest rate is calculated at 1/3 the Wall Street Journal Prime Rate determined at the time of the execution of the loan documents. At present the City’s loan rate is 1.08%. The loan is usually set for a maximum ten (10) years and is based on job creation. The number of jobs created must be maintained for the life of the loan. The payment on the loan is usually accepted at the end of the year as a lump sum but is negotiable.
· Fee Waivers: The City of Kirksville wants to encourage local businesses to grow, expand and build. Therefore, depending on the project scope and size, are willing to waive some of the building permit fees required by the City. These usually come as a percentage of the total permit fees, and do not exceed a certain dollar amount. City Council approval is a requirement.
· Industrial Park Land: The City of Kirksville owns several lots in the Industrial Park (which is also designated a Certified AT&T Fiber Park). These lots can be sold at a reduced cost if certain job creation numbers and investment is maintained. It is on a case by case basis.
· Infrastructure Improvements: The City of Kirksville has the ability to apply for grants if more infrastructure is needed in a location for expansion. This might include water/sewer additions; road improvements, or other public infrastructure. A requirement of the state for those grants states that at least 51% of the new jobs created must be taken by people of low to moderate incomes.