Governor signs legislation providing targeted tax cut to small businesses


Last year, McArthur’s Bakery entered what its owner termed the “cliché perfect storm.”

The cost of eggs, flour and shortening — key ingredients to just about every mouthwatering creation in its display cases — tripled. The bakery’s delivery arsenal of two vans and two refrigerated trucks hit a speed bump with high gas prices.

By October, the small business had racked up a $150,000 loss and was forced to lay off three of its employees.

In short, Randy McArthur said, “It was the toughest year in the 33 years I’ve been doing this.”

Enter Missouri Gov. Jay Nixon.

With less than three weeks left in the fiscal year and the state budget still in need of at least a nine-figure trimming to balance, Nixon stepped up to the bakery counter, ordered a box full of pastries and promised McArthur’s — along with more than 16,500 other businesses — a $14.5 million targeted tax cut.

“We’ve got to get this economy turned around, and it’s going to start in places just like this,” he said during a June 11 visit to the bakery’s Lemay Ferry Road location.

The tax cut is part of a bipartisan effort to shrink Missouri’s 250,000-deep unemployment line. It increases the minimum amount in assets a business would have to have to be liable for the tax. Previously, that amount was $1 million; the new legislation raises it to $10 million.

Eighty-two percent of the businesses that paid the tax at the old cap now will be exempt from it — a savings of about $875 per business.

The bipartisan jobs bill — House Bill 191 — which carries the tax-cut provision, passed through the General Assembly on a 28-6 Senate vote and a 153-2 House vote.

Nixon said small businesses across Missouri clearly are struggling in the sluggish economy, but still represent 95 percent of the state’s employers and would play a large role in future job creation.

“They are the ones most willing to wait out this recession and also to expand,” he said.

Asked if the government had a plan to make up the $14.5 million it would lose to the tax cut, Nixon replied, “Sure … we only spend what we have.”

Nixon also said the state intends to implement a technology assistance program to move businesses toward more Web-based sales, along with an energy audit program to help them determine where and how they could cut energy costs.

As for the bakery, McArthur said food prices have since dropped to more “manageable” levels. The business also took advantage recently of the buyers’ market climate and opened a new location in Chesterfield, he said.

And while $875 in tax savings may not solve all of his problems, McArthur said the message behind the money is more important.

“What it does is send a signal to small businesses across the state that the government is actually going to look to us and work with us to try and do something,” he said. “I think that as much as anything the discourse has started, and that will be more valuable …”