Taxes

Here is a quick overview of some of the benefits of doing business throughout Greater St. Louis related to taxes:

  • Corporate taxes are all among the lowest in the country in Missouri. The nonpartisan Tax Foundation ranks Missouri’s business tax climate 17th and Illinois' 23rd among the 50 states. The Tax Foundation also ranks Missouri with the 3rd-best Corporate Income Tax Index (1). Greater St. Louis offers one of the most tax-friendly regions in the U.S. for doing business, even before additional incentives are taken into account.
  • KPMG's 2014 Competitive Alternatives study found that Greater St. Louis was the 9th least expensive U.S. metro in which to do business among large international cities. The study included a range of business costs including taxes.

Greater St. Louis Taxes At a Glance

Tax

Missouri

Illinois

Corporate Income Tax

6.25% of Missouri taxable income (Federal taxable income with state modifications based on an evenly-weighted three-factor formula or an optional one-factor formula), with adjustments including deductibility of 50% of federal income tax.

7.75% of Illinois taxable income (Federal taxable income with state modifications based on a one-factor in state sales formula) which includes 5.25% state income tax and 2.5% (1.5% for S-Corps, partnerships and trusts) personal property replacement tax.

Personal Income Tax

$315 plus 6% of federal adjusted gross income over $9,000.

3.75% of Illinois taxable income (Federal taxable income with state modifications).

Local Income Tax

St. Louis City residents and workers pay a 1% earnings tax. Businesses pay based on the average allocation of gross receipts, payroll, and property in the City of St. Louis. St. Louis City employers pay a payroll tax of 0.5%.

No local earnings taxes.

Corporate Franchise Tax

No tax imposed.

Initial franchise tax of 0.15% of paid-in capital, thereafter annual franchise tax of 0.1% of paid-in capital, maximum of $2 million.

Property Tax

Residential property assessed at 19% of true or fair market; commercial and industrial property assessed at 32%; personal property at 33 1/3%. Business inventories are not taxed. Tax rates are the aggregate of local taxing districts and a .03% state tax.

Real property is assessed at 33 1/3% of market value. Personal property is not taxed. Business inventories are not taxed. Tax rates are the aggregate of local taxing districts.

Sales & Use Tax

4.225% of purchase price of tangible personal property and enumerated services. Local sales taxes also apply and vary by jurisdiction. In lieu of a regular use tax, a 4% special use tax is imposed on motor vehicles, trailers, boats and outboard motors.

6.25% of purchase price of tangible personal property and selected services. 1% tax on qualifying food, drugs, and medical appliances. Local sales taxes also apply and vary by jurisdiction.

Source: "2016 State Tax Handbook" CCH, 2015.

Sources: (1) “2016 State Business Tax Climate Index” The Tax Foundation, Nov. 17, 2015, http://taxfoundation.org/article/2016-state-business-tax-climate-index, Accessed 12/1/15.

LINKS TO:

More information on Illinois taxes is available from the Illinois Department of Revenue. A link to their website is available here.  

Further information on Missouri taxes is available from the Missouri Department of Revenue. A link to their website is available here.

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