Missourian publishes correction

On February 2, the Columbia Missourian published the following correction to an article published December 21, 2015:

The central premise of this story is incorrect. The Missouri Development Tax Credit program in which 3M is participating, in collaboration with the Columbia Area Jobs Foundation, requires that 3M pay property taxes on the lathes it purchased, then donated to and leased from the foundation. Justin McGough, senior tax manager for 3M, confirmed that the company has paid property taxes on the lathes since they were donated in 2012.

The Missouri Development Tax Credit program requires that participating businesses pay not only the property taxes on equipment leased through the program, but also that they pay to insure and maintain that equipment. Businesses in the program, according to guidelines provided by the Missouri Department of Economic Development, can claim credits against their Missouri liability for:

  • Income tax (excluding withholding tax).
  • Corporate franchise tax.
  • Bank, insurance premium and/or other financial institution taxes.
  • Express companies tax.
Also, this story misinterpreted the Internal Revenue Service’s private benefit doctrine as it applies to nonprofit organizations. The Columbia Area Jobs Foundation is established as a tax-exempt nonprofit 501(c) 3 charitable organization. Its articles of incorporation state that it exists exclusively for the benefit of the public, namely the city of Columbia. The foundation’s specific goals are to increase economic development and to create jobs. The financial benefits 3M receives by participating with the foundation in the tax credit program are incidental to the foundation’s mission of creating jobs and therefore not a violation of the private benefit doctrine.