A tax credit currently offered to wineries would also be extended to microbreweries and distilleries under a bill sponsored by State Rep. Bart Korman, R-High Hill.
Korman said he is not a big fan of tax credits, but he said this could help grow the area’s microbrewery and distillery economy.
Small towns could benefit from having more jobs in the sector, he pointed out. The wine industry has really grown in the last 15 years, he said.
Under his bill, distilleries and microbreweries would be allowed a state tax credit equal to 25 percent of the purchase price of all new and used equipment and materials that are used in the distilling of spirits or the brewing of beer.
This would create some savings for people who may put their life savings into building a microbrewery or distillery from scratch, Korman added. Such a tax credit could help businesses in the early days when they are trying to get up and running, he said.
Franklin County and the surrounding area boasts many wineries as well as some distilleries and microbreweries.
The tax credit would be good for only one tax year. Additional investments of equipment and materials would be required to get more tax credits. The tax credits could be received for a maximum of five years.
The total amount of tax credits that could be offered under the legislation could not exceed $4 million. The current tax credit law for wineries does not have a cap. Currently, a winery could make a massive investment and not be subject to a limit on the tax credit, he said.
Under the proposed cap, an individual business could not claim a tax credit of more than $100,000 per year, Korman said.
His bill was heard in a House economic development committee last week. Some committee members had concerns that the $4 million annual cap could result in one industry, such as microbreweries, getting all the tax credits for a particular year while wineries got nothing, he said.
Korman said he is looking into ways to keep the tax credits balanced between the wineries, microbreweries and distilleries.
Distilleries and microbreweries would apply to the Missouri Department of Economic Development for the tax credit. It would only be a state tax credit, not local or federal, he noted.