Governor Greitens’ Missouri Tax Reform Proposal Impacts Individuals and Businesses
Governor Greitens recently revealed the Working Families Tax Relief Plan for Missouri taxpayers. This plan is designed to be revenue-neutral, which means no budget cuts. Here are the highlights:
- Reduce top personal income tax rate from 5.9% to 5.3%
- Implement a non-refundable tax credit equal to 20% of the federal earned income tax credit
- Cut the corporate income tax rate from 6.25% to 4.25%
Changes to Achieve Revenue-Neutral Tax Reform
- Phase out the individual federal income tax deduction as income rises
- Repeal the corporate federal income tax deduction
- Require all corporations to use a new single sales factor apportionment method
- Eliminate the timely filed 2% vendor sales/use tax discount to businesses
- Eliminate the timely filed withholding tax discount to businesses
- Adopt the Streamlined Sales and Use Tax Agreement (SSUTA) - The SSUTA focuses on four major requirements for simplification of state and local tax codes: 1) state level administration, 2) uniform tax base, 3) simplified tax rates and 4) uniform sales sourcing rules.
There will be more discussion about Missouri tax reform in the coming months as the Governor works with the state legislature to finalize a plan. Contact the Brown Smith Wallace State and Local Tax team with any state tax issues.
Recap of the highlights above:
See Footnote 1 below: