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Committee backs bill letting Missouri businesses deduct R&D costs up front
Summary
A House committee voted to give House Bill 136 a do-pass recommendation after members discussed decoupling Missouri tax treatment of research-and-development expenses from federal amortization rules so firms could immediately deduct the full cost on their state return to aid cash flow.
A House committee voted to give House Bill 136 a do-pass recommendation after a short discussion of how the measure would change state tax treatment of research and development costs.
Representative (mover) said the bill would decouple Missouri’s treatment from federal rules so businesses could deduct the full R&D expenditure on their Missouri return rather than amortizing it over five years. “What it is is ordinarily research and development is 5 years. What it will do is it will decouple the the Missouri portion from the federal and then, they would be able to deduct the full expenditure, on their Missouri return,” the mover said.
Representative Taylor asked for clarification on the bill’s intent, saying he had not seen the sponsor and wanted to confirm the subject: “Just to clarify, if it's I don't see the bill sponsor here, but maybe you can speak to a chairman. I think fundamentally on this 1, we're talking about, amortizing research and development expenses.”
The mover said the change was raised to help a local employer maintain cash flow and remain in business; the mover referenced testimony that the affected company supported more than 50 jobs. “It was brought because of a company that had several jobs there… I believe he had said in testimony, if I'm correct, 50 plus, jobs. And this would just allow them to help them to maintain a cash flow to stay in business,” the mover said.
After discussion, the committee took a roll call and approved House Bill 136 with a do-pass recommendation. The transcript shows the motion and subsequent voice/roll-call yeses; a formal tally is not specified in the portion of the record provided.
The bill would change how Missouri calculates state taxable income for qualifying R&D expenditures by allowing immediate expensing on the state return rather than the five-year federal amortization schedule, according to the committee exchange. No statutory citations or effective dates were offered during the committee’s explanation.
The committee moved on to other bills after the vote.
