Your decision to locate, or relocate, your business in a distressed community can benefit both your company and the community. You could receive a 40% credit towards your income tax or equipment purchases, and offer your employees a tax credit equal to 1.5% of their annual gross income. More importantly, your small business will become a part of the foundation upon which your community is developed by expanding employment opportunities, increasing income, and bringing new hope into distressed areas.
A distressed community has high rates of poverty and unemployment. In Columbia, the Community Development Block Grant (CDBG) eligibility area is a distressed community. The CDBG eligibility area contains 30 census tracts with the highest poverty (55%) and unemployment rates (45%) (Missouri Census Data Center, 2009) in the city. Counties with census tracts defined as distressed communities include: Adair, Benton, Boone, Buchanan, Butler, Cape Girardeau, Clay, Cole, Dunklin, Franklin, Greene, Hickory, Howell, Jackson, Jasper, Jefferson, Johnson, Laclede, Lincoln, Nodaway, Pemiscot, Phelps, Polk, Ripley, St. Charles, St. Francois, St. Louis, Shannon, Stoddard, Warren, Washington, Wayne, and Wright.
The tax credits are fully transferable and in some cases carry back for three years. This means you can use the credits to be refunded for taxes already paid, or sell the credits for cash.
To be eligible you must have 100 or fewer employees and at least 75% of your employees must be working at the facility in the distressed community. Your business must be primarily engaged in:
- manufacturing,
- biomedical,
- medical devices,
- scientific research,
- animal research,
- computer software design or development,
- computer programming (including Internet, web hosting, and other information technology),
- telecommunications (wireless, wired or other), or
- be a professional services firm.
For more information about applying the tax credits, or determining if your business is located in a distressed community, feel free to contact us or you can visit the Missouri Department of Economic Development website.
Tre can help you explore a variety of ways to develop and finance your organization.
