The New Border War: Tax Cuts for MO and KS Businesses

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In the tug-of-war to lure new and growing businesses, Missouri has eight “opponents,” so to speak: the eight states that touch its borders. Perhaps none is currently pulling harder on its end of the rope than Kansas, which, according to the Johnson County Legal Record, is cutting its income tax rate for business owners by more than 1.5 percent:

Kansas is cutting individual income tax rates for 2013 and eliminating income taxes for the owners of 191,000 businesses. The top rate for all individual income taxpayers is to drop to 4.9 percent from 6.45 percent. A business tax break targets the owners of partnerships, sole proprietorships and other small companies by excusing them from taxes on earnings that they currently must report as individual income tax filers.  

The change puts pressure on Missouri, whose income tax rate is 6% on income over $9,000 for business owners and non-owners alike, to avoid losing business opportunities to its neighbor. As a result, the issue of cutting tax rates for business owners now appears to be a top priority for the state’s 2013 legislative season, as the Kansas City Business Journal explains. Pushing the issue in the public realm, the Legal Record reports a new group called Save Missouri Jobs, represented by lobbyist and former Missouri Republican Party chairman Woody Cozad and tied to Missouri Republican donor Rex Sinquefield, began running a TV ad in the Kansas City area with the stated goal of spurring action:

Legislative sessions resume in Missouri on Wednesday, January 9.

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