Good morning, MBA readers,
The new year brings a new tax cut dating back to an old governor’s administration. Shortly before resigning from office amid scandal in 2018, former Gov. Eric Greitens approved a plan to slash the state’s corporate tax rate to 4% from 6.25%. The law places Missouri’s corporate tax rate among the lowest in the nation. But it includes an option for calculating corporate income that analysts say could result in higher Missouri taxes for multi-state businesses, so it’s unclear at this point what its effect will actually be. Some say the cut will incentivize out-of-state businesses to set up shop in Missouri, while others say it just means less money for infrastructure, education and health care in the state. Scroll down for more about changes to the state’s tax code and the day’s other top business headlines.
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Survey suggests economic rebound in Midwest after months of slowdown
The Mid-America Business Conditions index increased to 50.6 in December from 48.6 in November, signaling that the economy is slowly growing in nine Midwest and Plains states. The survey previously found that the regional manufacturing economy was being harmed by the U.S. trade war with China and global economic slowdown. (Associated Press)
Greitens tax cuts for Missouri businesses take effect
A new tax law, enacted by former Gov. Eric Greitens hours before his resignation in May 2018, took effect Wednesday. The law reduces Missouri’s corporate income tax rate to 4% from 6.25%, making it one of the lowest rates in the nation. For some multi-state businesses, however, the law could result in a higher Missouri tax bill. (Associated Press)
Wall Street grows more skeptical of T-Mobile/Sprint deal
The spread between T-Mobile’s offer price for Sprint and the trading price, a key indicator of the deal’s risk, grew to $2.85 per share on Thursday from a low of 53 cents in May 2018. An analyst note published Thursday by Cowen & Co. estimated a 60% chance that a lawsuit seeking to block the merger will favor the 14 attorneys general suing the companies. (Bloomberg)
ESCO closes $187 million packaging units sale
The Ladue-based maker of filtration and fluid-control products for aviation and defense has completed its sale of three technical packaging businesses to South Carolina’s Sonoco Products. The sale yielded $187 million in cash, which ESCO officials previously said would be used to pay down debt and to convert a defined benefit pension plan to an annuity. (St. Louis Business Journal)
Southern Missouri banks to merge
Cassville-based Freedom Bank of Southern Missouri and Community National Bank in Monett have agreed to merge into Freedom Bank. The deal, expected to close in the second quarter, would create a single company with $430 million in assets, $367 million in deposits and $326 million in loans. Terms of the deal were not disclosed. (Springfield Business Journal)
HBM Holdings acquires North Carolina manufacturer
The Clayton-based private equity firm announced Thursday that it has bought HarperLove, a company in Charlotte, North Carolina that makes adhesives, additives and resins for packaging. HarperLove has about 75 employees. Financial terms were not announced. (St. Louis Post-Dispatch)
Lawsuit seeks fix to Jackson County assessments
A new lawsuit filed by Legal Aid of Western Missouri asks that a judge force the Jackson County Board of Equalization to undo last year’s property assessments, which the suit claims unfairly raised property tax bills for low-income, minority homeowners. The American Civil Liberties Union filed a similar suit against the county last month on grounds that the assessment process violated the federal Fair Housing Act. (Kansas City Star)
St. Louis law firm rings in the new year with new partners
Armstrong Teasdale, one of the largest law firms in the St. Louis area, has named 12 new partners in St. Louis, including seven equity partners. The firm also named six partners in Kansas City, Denver and Philadelphia. (St. Louis Business Journal)
St. Louis business groups offered study of airport privatization alternatives
Civic Progress and the Regional Business Council, both comprised of St. Louis area CEOs, announced this week that they offered to pay for a study of alternatives to privatizing St. Louis Lambert International Airport. A spokeswoman for the groups said Thursday that the offer is still on the table despite the privatization process being halted by St. Louis Mayor Lyda Krewson last month. (St. Louis Business Journal)
KC-area HVAC company announces new acquisition
Olathe, Kansas-based Temp-Con announced this week that it closed on its purchase of Cobb Refrigeration of Lenexa, Kansas. Temp-Con, which is owned by Centerfield Capital Partners and Caymus Equity Partners, employs more than 125 people. (Kansas City Business Journal)
Columbia Chamber pledges support for online sales tax bill
The Columbia Chamber of Commerce announced Thursday that it would support new sales tax legislation that would levy tax from out-of-state and online retailers. The chamber also unveiled its 2020 agenda, which includes continued funding for the University of Missouri and its nearly $221 million NextGen Precision Health Institute, plus transportation projects in the city. (Columbia Missourian)
Former finance director for St. Louis company accused of embezzling $900,000
A recent federal indictment accuses John J. Koeln, former director of finance for prepaid phone wholesaler Unlimited Prepaid Distribution, of stealing more than $900,000 from the company for personal use. Koeln’s attorney said Thursday that Koeln pleaded not guilty and that they “look forward to litigating this case.” (St. Louis Post-Dispatch)
Say that again
“I think for a long time, the lot of state legislators weren’t sure how to treat these products, whether they … should be treated as tobacco products or something kind of separate.”
That’s health policy expert Mark Meaney talking about Missouri’s lack of a tobacco tax on e-cigarettes, KCUR reports. Meany, deputy director at the Public Health Law Center’s Commercial Tobacco Control Programs at the Mitchell Hamline School of Law in Minnesota, called Missouri’s law handling taxation of vaping products “completely unique” in comparison with other states. Gov. Mike Parson launched a statewide information campaign last year outlining the dangers of e-cigarette use among young people, but he hasn’t spoken publicly in favor of a tax on the devices. Parson said in November that he “(doesn’t) know that pricing it out of somebody’s reach is always the right answer.” Illinois, which just started charging a 14.5% tax on e-cigarettes, expects to receive some $15 million in 2020 from that tax alone.
Hello, my name is
Stephen L. Reintjes Sr.
That’s the new CEO of North Kansas City Hospital and its physician network subsidiary, Meritas Health, the Kansas City Business Journal reports. Reintjes, who will succeed CEO Peggy Schmitt when she retires in April, is the founder of the neurosurgery practice at North Kansas City Hospital and serves as a board member for BioNexus KC and the Midwest Transport Network. He has held a number of different positions at the hospital over the past 30 years, including medical staff president.
It’s been a pleasure doing business with you this morning. Make the first weekend of 2020 a great one.