Corporate Apportionment laws may help provide the ‘stable, business friendly environment’ Amazon wants


JEFFERSON CITY, Mo. – As the deadline quickly approaches for cities across the U.S. and Canada to submit their applications for consideration for the new Amazon headquarters, many are looking inwards to assess Amazon’s criteria.

Among other things, Amazon is asking for cities to “identify incentive programs available for the project at state/province and local levels,” and also mentions, “A stable and business-friendly environment and tax structure will be high-priority considerations for the Project.”

One tool in Missouri’s business toolbox is the newer Corporate Apportionment laws passed in 2014 and 2015.

Tracy King, now with the Gate Way Group, said Missouri was motivated to update their Corporate Apportionment laws after many businesses left the state because the state had multiple taxes for businesses who sold their products out of state. SB 19 updated Missouri Corporate Apportionment laws in 2015. The law makes Missouri the only state in the country where corporations can annually choose which corporate apportionment metric they would use to determine what kind of corporate tax they should file.

Because of this law, corporations can choose from three methods to determine how much of their revenue was generated specifically in Missouri. She feels that Missouri’s Corporate Apportionment laws would be appealing for companies like Amazon to operate in Missouri.

Tracy King

“It’s good for Missouri because it gives [companies] options when they’re filing and paying their corporate income taxes on how their income is attributed to Missouri,” King explained. “It’s an attractive option for companies in that it gives them options to choose when filing their taxes.” She believes that SB 19 makes the state more attractive than others so that larger, wealthier companies would be more willing to operate out of Missouri.

On the other hand, Amy Blouin, Executive Director of Missouri Budget Project, says that while SB 19 gives companies the option to choose which taxes it pay, it permits them to pay the least amount of taxes. The government relies on tax dollars to maintain an infrastructure that allows people and businesses to exist in cities.

Amy Blouin, Executive Director of the Missouri Budget Project

“When you look at where we stand in terms of our ability to invest in the services and infrastructure that businesses need, like the economy needs to survive, we fall well behind other states,” she says.

It is especially important to tech companies to have a skilled, educated labor force. Industries rely on local governments to be able to adequately educate their citizens so they can fulfil the jobs that companies need.

“We fall well behind other states in things like investments in K-12 and higher education. Higher education has been eviscerated by budget cuts over the last several years and that makes a difference for businesses,” she says.

Critics of SB 19 can point to the fact that Missouri lost $24 million in annual tax revenue the year after it took law. In addition to years of low tax revenues, the Missouri budget has been forced to withhold and cut hundreds of millions of dollars in social services.

Ray McCarty, AIM President

Ray McCarty, CEO of Associated Industries of Missouri and former Executive Director of Taxpayers Research Institute of Missouri, feels that it’s misguided to evaluate Missouri’s economic strength simply by the General Revenue.

“That’s really a flaw with our fiscal note system that we have,” McCarty said. “When people in the Capitol try and assess what a bill is going to cost, they never add any of the additional benefits that you would have from having that formula.

He believes the bill acts as an investment in the Missouri economy.”If we’re able to attract an Amazon location to Missouri, that’s why we did what we did: so we could attract companies to come to Missouri and operate in a low tax environment. It is an investment that was made by the state,” McCarty states. “We know that it will pay off in the long run.”

“If we’re able to attract an Amazon location to Missouri, that’s why we did what we did: so we could attract companies to come to Missouri and operate in a low tax environment. It is an investment that was made by the state,” McCarty stated. “We know that it will pay off in the long run.”

King agrees and says the local economy will thrive because more businesses – like Amazon – will want to operate out of the state because of the SB 19.

“The best economic development tool you can have is getting jobs,” King says. “When you have those new jobs in the state, there’s a lot of economic activity that’s indirect from folks who are making that money, will spend that money in Missouri. You also have a company that [would be] here that’s paying income tax, sales tax, property tax – that’s all directly related to our economy.”

However, as King mentions, it is a complicated process to measure the business climate of a state and results may vary based on which methods are considered. While some, like the Tax Foundation, show Missouri has a decent corporate climate, others disagree because they weight their ranking differently.

“It depends on what it is, you’re actually want to look at,” King says. “We’re almost dead bottom in legal environment because of the tort issues we have, which we made some good strides on last year, labor issues is another one… that gives you a snap shot of where we’re at.”

Brunner’s Facebook post

One of the issues that contribute to business climates are citizen friendliness, and negative images of the St. Louis protests may contribute to the perception of an unstable, unfriendly environment.

The timelines of the Jason Stockley verdict worries some Missourians who feel that the threats from protestors, “If you kill our kids, we’ll kill your economy,” might dissuade Amazon from considering St. Louis or even Kansas City from settling in Missouri. Former gubernatorial and senatorial candidate and businessman John Brunner posted on Facebook his concerns the protests would lead to Missouri being a turn-off to Amazon and other companies looking at Missouri.

However, many believe the protests will not be an immediate turn-off for Amazon. Tommy Robbins of Strategic Capitol Consulting called Amazon CEO Jeff Bezos “a principled leader whose vision can see beyond St Louis’ present turmoil for all its opportunities.”

Amazon’s deadline for proposals is October 19. Their current headquarters are in Seattle.




Michael Layer is a reporter for the Missouri Times and the Missouri Times Magazine. He joined the Missouri Times in August 2017 after graduating from Goucher College the previous May. To contact Michael, email or follow him on Twitter @_MichaelLayer