KEY AIM LEGISLATIVE VICTORIES

 

TAX POLICY

Income & Corporation Franchise Taxes

AIM is a leader in all tax discussions as the president has 40 years of experience with Missouri taxation, including lobbying for 34 years. We used this experience to cut Missouri income taxes for every Missouri business by at least 40%!

Associated Industries of Missouri (AIM) was instrumental in achieving a corporation income tax rate cut, elimination of the corporation franchise tax, and reduction of business income taxes for other types of businesses, such as LLC’s, LLP’s, partnerships, etc., by establishing a “business income deduction” of 20% and lowering the individual income tax rate. This individual income tax rate cut also benefits Missouri employees as well as Missouri employers.

Other income and withholding tax victories:
 

• Eliminated the requirement to file about 20,000 withholding tax returns for small businesses by increasing the filing thresholds (2016, eff. 2018).

• Partnership audit language aligning Missouri treatment of such audits with federal law (2020);

• State and local tax (SALT) deduction and entity level tax credit language (2022); and,

• Restored the income tax deduction for capital gains realized when converting to an Employee Stock Ownership Program (ESOP) (2023).

 

Sales and Use Taxes

Associated Industries of Missouri wrote and passed a partial exemption for all utilities and all inputs used in manufacturing and mining in 2007 and completely eliminated state and local sales and use taxes on such utilities and inputs in 2021, effective January 1, 2023. This dramatically reduced the cost of utilities and items that are consumed in the manufacturing process and are not otherwise exempted from the tax. The goal was to eliminate double taxation and we are proud of that accomplishment.

Here are some other key victories in the sales/use tax category:
 

• Exempted from sales/use taxes all items used in the transmission and distribution of electricity, lowering utility bills for utility and coop customers and alleviating audit difficulties for utility companies and electric cooperatives (2024);

• Delayed implementation of a Mo. Supreme Court decision until we could pass language abrogating the decision that would have eliminated a sales tax exemption for telecommunications and other companies (2016, 2017, 2018);

• Implemented sales/use tax nexus provisions in response to the Wayfair decision, eliminating an unfair competitive disadvantage previously held by retailers outside Missouri selling to Missouri customers (2021);

• Protected against a provision that would have allowed out-of-state companies to operate without the same tax liabilities as Missouri companies, achieving veto of the provision by Governor Matt Blunt (2007);

• Passed a qualified exemption for larger data centers (2015);

• Exempted durable medical equipment (2016);

• Clarified delivery charges exemption (2017);

• Limited city and county sales tax rates (2017);

• Extended the refund statute of limitations from 3 years to 10 years (2019);

• Restored sales tax exemption for hotel/motel utilities to correct a misinterpretation of a Mo. Supreme Court case by the Missouri Dept. of Revenue (2022); and,

• Expanded a research and development sales tax exemption to include non-manufacturing research and development (2022).

 

Property Taxes

• Clarified when property tax rate rollbacks were required (2008); and,

• Changed property tax appeal dates and shifted the burden of proof of value to the assessor when the property tax assessment increases more than 15% (2020).

 

ECONOMIC DEVELOPMENT

Associated Industries of Missouri works to ensure the measures we support to attract new businesses to Missouri also benefit our existing Missouri businesses. Here are some of our economic development accomplishments:
 

• Restored the Research and Development (R&D) Tax Credit after multiple years of hard work (2022);

• AIM’s president drafted the original Quality Jobs Act that became the Missouri Works program (2005);

• Supported enhancements to the Missouri Works program, including establishing a deal closing fund (2013, 2019);

• Passed bill allowing suspension of Missouri Works required job creation numbers when business is interrupted to do a declared emergency, such as COVID-19 (2022);

• Supported the Missouri Works training program (2017) and Missouri One Start (2019).

• Led the effort and passed the Manufacturing Jobs Act that allows benefits to companies that are making a new product (or significantly different product) and retaining jobs in Missouri (2010);

• Supported auto manufacturing incentives for capital investment (2019);

• AIM helped start the "Buy Missouri" program which helps promote Missouri made goods and creation of "Buy Missouri Week" to emphasize the program (2018);

• Defeated efforts to indiscriminately cause all tax credits to expire (2019); and,

• Revived the film production tax credit and supported and passed a new performance rehearsal tax credit to attract performing acts to Missouri facilities (2023).

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TORT REFORM

While we are proud of our legislative accomplishments, we realize our hard-earned victories are sometimes partially or completely eliminated by just one court decision. Plaintiffs’ attorneys thrive in Missouri by preying on Missouri businesses. In fact, Missouri has the embarrassing distinction of having two urban areas that always rank high on national lists as the best places for plaintiffs to win big verdicts against businesses. We work to ensure the courts are fair and balanced. Here are a few of our tort reform successes:

• Aligned discrimination standard with federal law (2017);

• Required a whistleblower to be notifying authorities of a company’s violation of a statute or regulation to receive protection (2017);

• Eliminated a strategy of plaintiffs’ attorneys that would sue supervisors as a backdoor means of suing a company (2017);

• Placed reasonable caps on "pain and suffering" damages resembling federal caps (2017);

• Required proof of more than mere negligence for a court to award punitive damages and made other changes designed to reduce the use of punitive damages as a means of increasing settlement amounts (2020);

• Corrected a process used by plaintiffs’ attorneys to move cases to more liberal venues by establishing criteria for determining venue and when additional defendants may be properly joined for the purposes of venue (2019);

• Adopted the Daubert standard for determining whether an expert witness is truly an “expert” (2017);

• Ensured evidence of seatbelt use is admissible into evidence in product liability lawsuits against manufacturers (2019);

• Established medical malpractice noneconomic damage limits (2015);

• Collateral source fix to prevent billed items that are never paid from being included in actual cost recovery (2017);

• Prevented plaintiffs' attorneys from colluding with defendants and obtaining judgments in excess of policy limits against insurance companies by allowing insurance companies to intervene in lawsuits and setting guidelines for arbitration proceedings in such cases (2017, 2021);

• Provided business premises liability protection against lawsuits by trespassers or guests (2018);

• Established limits on frivolous discovery motions in litigation to more closely align with federal limits (2019);

• Established COVID liability protections for businesses to protect against frivolous lawsuits alleging a visitor or employee had contracted COVID at a particular place of business (2021); and,

• Successfully defended against multiple measures that would have prevented employers from requiring vaccination of employees, preserving employers' choice in such decisions (2022, 2023).

 

WORKERS’ COMPENSATION

Associated Industries of Missouri was founded in 1919 to write the state’s first workers’ compensation law, and we have consistently represented businesses in all workers’ compensation laws and amendments. Here are a few of our successes in this area in recent years:
 

• A complete workers’ compensation reform bill, including requiring courts to apply language as it appears in statute, rather than using creative interpretations of the law (2005);

• Reduced the maximum Second Injury Fund Supplemental Surcharge from 3% to 2.5% (2021) and negotiated and passed a further reduction in the surcharge from 2.5% to 1% and allowed the Dept. of Labor and Industrial Relations to set the rate in ¼% increments instead of ½% increments (2023), potentially saving employers $34 million;

• Reformed the Second Injury Fund by requiring claimants to show work or military service is the cause of injuries that allow access to the Fund, and ended plaintiffs’ attorneys draining of the nearly bankrupt fund by eliminating permanent partial disability claims against the Fund (2013);

• Reformed standards for bringing a suit alleging workers’ compensation retaliation (2017);

• Work comp maximum medical improvement guidelines established (2017);

• Established standards for co-employee liability (2012);

• Set guidelines for determining when an employee had abused alcohol or drugs at the time of an accident and reduced benefits accordingly (2017);

• Terminated benefits when an employee voluntarily quits after an employer has made accommodations for the employee (2017);

• Denied successor death benefits to a person who is voluntarily dependent - able to work but chooses not to work (2017); and,

• Supported and passed legislation to allow Missouri Employers Mutual to become a fully private company, allowing the company to provide policies to Missouri employers with locations inside and outside Missouri (2023).
   

UNEMPLOYMENT

AIM has worked hard over the years to ensure the Unemployment Trust Fund is used to pay appropriate unemployment claims and maintains a balance sufficient to pay such claims, without overtaxing our Missouri employers who support the Fund. AIM also helped navigate through the unemployment crisis that caused many states, including Missouri, to owe the federal government due to sustained periods of high unemployment. Here are some other unemployment issues:
 

• In 2015, AIM passed an indexing bill, reducing the number of weeks of unemployment benefits during periods of low unemployment. The bill was vetoed, the veto was overridden by the Legislature, but the Supreme Court invalidated the veto override due to a procedural issue. Therefore, the change in the law was never made and we continue to work toward that goal (2015);

• AIM passed an extension of the Shared Work program that allowed Missouri businesses to retain quality employees that otherwise would have been laid off and lost to other employers (2010); and,

• AIM passed a bill requiring three work searches by claimants each week they seek unemployment benefits (2019).

 

REGULATORY REFORMS

Business leaders have enough to do in running their businesses. They don’t need additional government burdens, especially those that are unnecessary. Here is how we have tried to help:

 

• Passed biennial corporation registration, allowing corporation annual reports to be filed every two years, rather than every year (2009);

• Supported terminating all state regulations on a rotating basis to ensure they are relevant and accurate (2012); and,

• Passed bill requiring a fiscal note for all regulations, including emergency regulations (2019).

 

ENVIRONMENTAL ISSUES

Missouri businesses want a healthy environment and reasonable environmental regulations. Administration of environmental laws and regulations should be done in a fair and consistent manner and AIM believes the Missouri Department of Natural Resources (DNR) should help businesses know the proper statute and regulations and help them comply, rather than simply existing to punish businesses. Here are some of our actions in the environmental area:
 

• Because DNR was pursuing an action based on EPA guidance documents rather than federal statute and regulations, AIM supported a resolution that was ultimately passed, voiding a hazardous waste fee increase proposed by the DNR (2020). We passed legislation prohibiting the use of guidance in punitive measures against regulated entities if they object to the use of such guidance and extended the stakeholder fee-setting process for many programs (2023);

• Passed law stating DNR may not enact regulations that are stricter than federal laws or regulations, preventing actions taken based on "guidance documents" from EPA (2012 and 2022);

• Required DNR to "show their work" when calculating penalties (2022);

• Identified an appropriation issue showing funds that were supposed to be used for specific programs in DNR were transferred to support attorneys in the Attorney General’s Office without justification – over multiple years! DNR staff were not aware of the issue until it was raised by AIM as we reviewed the DNR’s request for additional funding (2020);

• Supported provision that county regulations may not be stricter than state regulations (2019);

• Defeated attempts to reduce the maximum contaminant level of vinyl chloride to barely detectable and unreasonable levels (2023); and,

• Eliminated wasteful and unnecessary certification of pollution control equipment to determine eligibility for a sales/use tax exemption for such equipment (2008).

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TRANSPORTATION

A safe and efficient highway transportation system is a necessity in today’s world. “Just in time” delivery is employed in many manufacturing facilities and that delivery requires a well-functioning highway system. Here are some of our efforts regarding highway funding:
 

• Supported and passed funding to rebuild and expand Interstate 70 to six lanes statewide ($2.8 billion), $100 million for other roads, $20 million for preparatory work on Interstate 44 (2023);

• AIM and MTD, our subsidiary organization, first passed language eliminating the diversion of highway funds to agencies that do not make highway improvements, then worked very hard and passed the first increase in funding for road and bridge improvements in 25 years (2021). We continue to defend against repeal of that funding (2022, 2023);

• Supported and helped pass a proposal to allow $301 million in bonds to be issued, allowing repair of 215 bridges on the state highway system (2019); and,

• AIM opposed and defeated a MoDOT proposal to levy fees based on miles traveled for hybrid vehicles - MPG tax (2019).

 

RIGHT TO WORK

Associated Industries of Missouri has worked to pass the “right to work” law in Missouri for decades. We finally passed a bill in 2015, but the bill was vetoed by Gov. Jay Nixon and an attempt to override his veto was unsuccessful. We passed another bill in 2017, but the law was overturned after unions used Missouri’s referendum process to put the issue on the ballot and voters overwhelmingly rejected the proposition. AIM continues to support “right to work” because of the impact it could have on Missouri’s ability to attract and retain businesses that require location in a “right to work” state. We have also supported local options, allowing each county to adopt “right to work.”

 

HUMAN RESOURCES

Every Missouri employer faces workforce issues. Finding employees that will pass drug tests, show up for work on time and ready to work, possess the skills necessary for the job, get along with co-workers, etc., has become extremely difficult. To make matters worse, some local government leaders wanted to establish a minimum wage higher than the state minimum wage and other groups wanted to artificially push up wage rates by increasing the minimum wage. Here are some of the issues we supported and opposed in this area:
 

• Passed state preemption of local ordinances establishing a minimum wage (2017);

• Fought against but lost a statewide minimum wage referendum establishing annual increases to $12/hour minimum wage and adjusting for inflation in future years (2018);

• Supported career and technical education to help prepare workers for the workforce (2018, 2021, 2022);

• Supported and passed upskill credential and internship tax credits (2023);

• Supported STEM career awareness programs and emphasis on computer science in high schools (2018);

• Defeated government-run IRA program with administrative burden borne by employers (2019);

• Supported Fast-Track Workforce Incentive Grants and modifications (2019, 2022);

• Successfully defeated a well-intended attempt to establish a set of criteria in state law different than federal standards for determining whether a relationship is that of an employee or independent contractor to avoid multiple standards (2022);

• Passed law allowing teacher externships to count as graduate-level coursework for salary schedule purposes (2019);

• Supported and passed a statewide prescription drug monitoring program to help reduce prescription drug abuse (2021);

• Supported and passed optional state-run retirement system for smaller private employers with less than 50 employees (2023);

• Defeated attempt to expand ability of employees to sue employers through expansion of the Mo. Human Rights Act (2023); and,

• Defeated a bill that would have required all employers to use EVerify and institute onerous employer reporting of immigrant employment status to a government database with felony penalties (2023).

 

MISCELLANEOUS ISSUES

• Fought against and obtained veto of bill that would have created a backdoor tax increase on business by “sweeping” special funds, including funds supporting DNR administration and those financing the Public Service Commission, into General Revenue (2017);

• Defeated ill-conceived tax on all HMO plans (2019);

• Defeated government price fixing for drugs (2019);

• Supported allowing utility companies to responsibly replace gas pipelines before they fail and recover the cost through rates (2020);

• Defeated attempt to eliminate voter-approved protections against inclusion of costs in utility rates for electricity generation projects until such projects are finished and put into use (2022, 2023); and,

• Defeated attempt to change eminent domain rules affecting a large renewable project that will provide low cost and reliable electricity to Missouri businesses (2022).