Missouri House Revises Senate Bill to Lower Income Taxes and Increase Sales Tax
On April 24, 2013, the Missouri House approved an amended bill to lower individual and corporate income taxes while increasing the sales tax to fund schools and road projects. The tax changes would start taking effect in 2014, becoming fully implemented in 2018. The Senate previously passed a different version of the bill and must now consider the House revisions. Below are highlights of what the bill revisions propose; click here for additional information and details about the legislation.
Corporate Income Taxes
- The House and Senate both propose to slowly reduce the corporate income tax by 0.75% over five years.
- For all tax years beginning on or after January 1, 2018, the corporate income tax rate would be 5.5%.
- The bill would exempt the first $25,000 of corporate income from taxation.
Individual Income Taxes
- As long as state revenue continues to increase by $100 million per year, the House-approved bill proposes the top individual income tax rate of 6% be cut by 0.66% over five years.
- For all tax years beginning on or after January 1, 2018, the maximum personal income tax rate would be 5.33%.
- The Senate and House both propose that residents with adjusted gross incomes below $20,000 receive double the personal deduction on individual income taxes.
- To lower the income tax, the House-approved bill would gradually increase the state sales tax by 0.6% over five years.
- For all calendar years beginning on or after January 1, 2018, the sales and use tax rate would be 4.6%.
- The increase would only take effect if the state revenue continues to increase by $100 million per year.