Missouri Quality Jobs Program

Missouri Quality Jobs Program Sections 620.1875-620.1890

Purpose of MQJ • To facilitate the creation of family supporting jobs (average wage of new jobs is county average wage or higher) in Missouri that offer health insurance benefits to employees • Businesses may be either existing and expanding or new to Missouri

Eligible projects Facilities and employees located in Missouri For-profit Non-profit Ineligible Projects Gambling Retail Trade Food and Drinking Places Educational Services Public utilities Educational services Religious organizations Public administration Ethanol distillation or production & biodiesel production Delinquent in non-protested taxes or payments (state, federal or local) Filed or publicly announced intention to file bankruptcy (if a company filed for bankruptcy in 2009, it may qualify if certain conditions are met) Who can participate?

Multiple facilities/companies • A company may treat facilities located within fifteen miles of each other or within the same county as one project facility if engaged in the same business activity • A parent company may apply for the program with multiple wholly owned subsidiaries as one project

Special Requirements • Companies cannot simultaneously earn MQJ benefits at the project facility with other state programs: • Enterprise Zone/Enhanced Enterprise Zone • Business Facility • Rebuilding Communities • Brownfield Jobs/Investment tax credits • Special conditions apply when MQJ and other programs affecting state withholding taxes are used at the same time. • New Jobs Training • State TIF • MODESA

Missouri Quality Jobs • New jobs must meet criteria • Average wage must be at least the county average wage • Health insurance must be offered with at least 50% of the premium paid by the employer for all full-time employees in Missouri • Must be scheduled to work an average of 35 or more hours a week at the project facility • If the employee spends less than 50% of their work time at the facility, they can still be considered at the facility if certain conditions are met.

Missouri Quality Jobs • Three segments of program • Small/Expanding • Technology • High Impact

Small/Expanding projects • Criteria • Rural areas – 20 or more new jobs created within 2 years of approval • Non-rural areas – 40 or more new jobs created within 2 years of approval (Boone, Buchanan, Clay, Greene, Jackson, St. Charles, St. Louis City & County) • Benefit • retention of 100% of state withholding tax for new jobs • 3 years if average wage of new jobs is 100-119% of county average • 5 years if average wage of new jobs is greater than 120% of the county average

Small/Expanding Project Example3 year benefit Project – 50 new jobs in year 1 with no additional new jobs in years 2-3; average starting wage is $40,000; locating in St. Charles County

Small/Expanding Project Example5 year benefit Project – 50 new jobs in year 1 with no additional new jobs in years 2-5; average starting wage is $45,000; locating in St. Charles County

Technology projects • Criteria • 10 or more new jobs created within 2 years of approval • NAICS code for business activity must be an approved Technology NAICS • Benefit • 5% of payroll of new jobs for 5 years plus Average Wage Bonus if qualified • Benefit in form of retained withholdings and state tax credits • NOIs received after June 4, 2009 are not subject to the per company cap

Technology Project Example Project – 10 new jobs in year 1 plus 5 additional new jobs each year in years 2-5; average starting wage is $43,000; locating in Jackson County; facility has NAICS approved for Technology portion of program

High Impact projects • Criteria • 100 or more new jobs created, the first within 1 year of approval, remaining 99 within two years of hiring first new job • Benefit • 3% of payroll of new jobs plus Average Wage Bonus and/or Local Incentives Bonus if qualified • NOIs received after June 4, 2009 are not subject to the per company cap

High Impact Project ExampleNo programs affecting withholdings Project – 200 new jobs in year 1 plus 50 additional new jobs each year in years 2-5; average starting wage is $75,000; locating in St. Louis County; local incentives of at least 50% of the new local revenue generated, over 10 years

High Impact Project ExampleWith New Jobs Training Program Project – 200 new jobs in year 1 plus 50 additional new jobs a year in years 2-5; average starting wage is $75,000; locating in St. Louis County; local incentives of at least 50% of the new local revenue generated, over 10 years

Average Wage Bonus • Average Wage Bonus • Based on percentage of new job average wage to county average wage • Greater than 120 and up to 140% - Company receives additional 1/2% of payroll of new jobs • Greater than 140% - Company receives additional 1% of payroll of new jobs

Local Incentives Bonus • Local Incentives Bonus • Bonus based on the local incentives provided to the project as a percentage of new local tax revenue generated by the project, over 10 years • 10-24% - Company receives additional 1% of payroll of new jobs • 25-49% - Company receives additional 2% of payroll of new jobs • 50% or more – Company receives additional 3% payroll of new jobs

Quality Jobs • Tax credits capped at $80 million annually • Withholdings are not capped

Multiple MQJ projects/NOIs • No limit to the number of projects for a company as long as the minimum program requirements are met for each project • NOI must be filed to begin a new project period (no new jobs will be added to the previous project when next NOI is received by DED), establishing a new base employment number and job creation deadline • Multiple MQJ projects may be concurrent

Two NOI example (Phased Project) Project – 200 new jobs in year 1 (NOI I), 150 new jobs in year 2 (NOI 2); average starting wage is $42,000; locating in Greene County; local incentives of at least 50% of the new local revenue generated, over 10 years

Same project – One NOI Project – 200 new jobs in year 1, 150 new jobs in year 2 ; average starting wage is $42,000; locating in Greene County; local incentives of at least 50% of the new local revenue generated, over 10 years

Application Process • Company completes and submits Notice of Intent (NOI) • NOI is approved or denied within 30 days of receipt • When company reaches threshold, complete the Application to Retain Withholding Taxes • DED reviews Application to Retain to ensure all program requirements are met • DED issues approval to Department of Revenue (DOR) • DOR notifies company that they can begin retaining withholdings and gives further instruction on the DOR process • Company files MQJ Annual Report/Tax Credit application within 30 days of the end of the company’s tax year

MQJ Tax Credit • MQJ tax credit can be applied to Chapter 143 (state income tax, excluding withholding tax) and Chapter 148 (financial institutions tax). • MQJ tax credits must be claimed within one year of the close of the taxable year that they were issued. • MQJ tax credits must be applied to tax liability for the year in which they were earned. • MQJ tax credit is refundable, sellable, transferrable or may be assigned.

Ronda Anderson – 573-522-9062 or ronda.anderson@ded.mo.gov Matt Fischer – 573-522-2790 or matt.fischer@ded.mo.gov Melody Worley – 573-751-9048 or melody.worley@ded.mo.gov Quality Jobs Program Department of Economic Development 301 W High Street, Suite 770 PO Box 118 Jefferson City, MO 65102 www.ded.mo.gov Fax: 573-522-4322 Contact Information

Missouri Quality Jobs Program