On July 14th, Governor Mike Kehoe of Missouri signed Senate Bill 145 [senate.mo.gov], eliminating the ability for localities to impose licensing taxes and regulations on youth-owned businesses. This provided young entrepreneurs with a sweeping statement of support: Your dreams deserve encouragement, not red tape.
Unlike many other states where youth business exemptions include revenue caps or time limits, Missouri’s law provides an unrestricted defense of enterprises against local bureaucracies and inefficiencies for entrepreneurs 18 and under. In a world where economic competition increasingly depends on innovation and fresh ideas, Missouri’s approach offers a model for other states seeking to enhance entrepreneurship. This legislation will provide Missouri with a consistent pipeline of experienced business leaders, ready to shape the state’s economic future.
As a 20-year-old who has been discouraged by the challenges of navigating the complex web of business regulations, I can attest to the benefits this legislation will provide to young and teenage entrepreneurs. Many of the bureaucratic processes that are simply speed bumps for established business owners are roadblocks to teenagers with few resources, little experience, and inferior legal standing.
These regulatory burdens discourage young people from building something of their own, pushing them instead toward dependency and under-the-table work, like babysitting and dog walking, with little legal protection or tax benefits. By removing these barriers, Missouri encourages youth business activity, benefiting everyone.
Entrepreneurs act as the market’s discovery mechanism, identifying unmet needs, smoothing inefficiencies, and creating solutions to improve lives. When we restrict this process for young people, we fail to utilize their unique perspectives and unconstrained creativity.
While many states [gpb.org] exempt children from obtaining permits or licenses to run small businesses, most impose significant restrictions. For example, Pennsylvania’s exemption [legis.state.pa.us] only applies to businesses making under $5,000 annually and operating fewer than 84 days per year. While this may protect the so-called “side hustle,” it does little to truly allow the youth to apply themselves to the market.
Unlike these piecemeal exemptions, Missouri’s law covers far more than lemonade stands and babysitting services. Today’s teens are running the businesses of the future. They develop mobile apps [make.com], provide digital marketing services [medium.com], and build freelance consulting businesses [careeraddict.com]. All of these next-generation youth businesses are protected from unnecessary hurdles under S.B. 145.
The entrepreneurial spirit fostered in early years doesn’t disappear at age 19 either. Nearly one-fourth [gemconsortium.org] of 18-24 year-olds self-identify as entrepreneurs, and 21% intend to start a business in the next three years. By encouraging entrepreneurship before age 18, we can amplify this trend even further. The teen running a lawn care business today becomes the adult launching a landscaping company tomorrow. The high school student building a tutoring service develops the skills and confidence to start an educational technology company five years later.
According to Junior Achievement [jausa.ja.org], 13% of adult entrepreneurs launched their first business at age 18 or younger. Additionally, research from Stanford’s Graduate School of Business shows that young entrepreneurs who establish multiple businesses see their sales revenue almost double [gsb.stanford.edu] between their first and second, with second firms typically more successful than those started by older entrepreneurs. By the age of 25, a person who started their first company at 16 will have nearly a decade of real-world experience, more than the average MBA graduate [usnews.com]
Critics argue [fastercapital.com] that youth business licensing serves important consumer protection roles. However, the very same tort law and consumer protection statutes that govern an adult-run business apply equally [lawshelf.com] to teenage entrepreneurs. Licensing fees and regulatory compliance do little more to enhance consumer safety. If a teenage web designer fails to deliver promised services, clients have the same legal recourse they would have against any adult.
S.B. 145 goes beyond tax relief. It positions Missouri at the front of a growing movement that has seen over a dozen states [libertas.org] since 2017 protect young entrepreneurs from unneeded bureaucratic burdens. By trusting these innovators to serve their community and support themselves without unnecessary regulatory interference, Missouri has taken a step towards restoring the American dream of economic opportunity for all.
Young community members deserve the chance to learn through entrepreneurship, developing maturity and know-how without regulatory obstacles that serve little purpose. By trusting in our youngest citizens with economic freedom, we are investing in our future.
