Missouri R&D Tax Credits

Possible Missouri R&D Tax Credit in 2023

‍‍Missouri currently does not have an R&D tax credit that mirrors IRC § 41.

However, on June 30, 2022, Missouri Governor Mike Parson signed HB 2400 which gives the Missouri Department of Economic Development (DED) the authority to authorize the tax credit after January 1, 2023.

If the DED chooses to reinstate the Missouri R&D tax credit, taxpayers could receive credit for 15% of their Qualified Research Expenses (QRE) or 20% of their QREs if the research was performed in conjunction with a private or public college or university located in Missouri.

The annual aggregate cap on these credits would be $10M, with $5M committed to minority business enterprises, women's business enterprises, and small businesses. The credit would be capped at $300,000 per taxpayer. If authorized, the Missouri tax credit would remain in place until December 31, 2028.

Reinstating the tax credit would spur investments and innovations within the state of Missouri. We strongly support HB 2400, and will keep our Missouri clients updated on the DED's decision.

Missouri New Enterprise Creation Act Credit

There is currently a new Enterprise Creation Credit (Mo. Rev. Stat. § 620.650) allowing corporations that make qualified contributions for certain technology investments to receive a credit against the corporation income tax for the full amount of the contribution.

A “qualified contribution” is a cash contribution to a qualified fund under the terms of a contract between the qualified fund and a qualified economic development organization authorized by the Missouri Technology Corporation ("MTC") to enter into such contracts.

In order to obtain the credit, organizations must be established under Missouri law and approved by the MTC in order for the fund to be eligible for the credit. The contributor must apply to the DED for the credit using a prescribed form.