Missouri May Trade Lower Income Taxes for Higher Sales Taxes
What would lower state income taxes and higher sales taxes mean for Missouri businesses and individuals?
A Missouri Senate tax bill, if passed by the House and signed by the Governor, would cut Missouri income taxes for businesses and residents but increase the sales tax burden. Below are highlights of what the bill proposes, or click here to read the full bill summary.
- Expect a 0.75% reduction in the corporate income tax rate over a five-year period beginning January 1, 2014.
- For all tax years beginning on or after January 1, 2018, the tax rate on corporate income will be 5.5%.
- Maximum tax rates on personal income may be reduced by 0.75% to be realized over a five-year period beginning January 1, 2014.
- For all tax years beginning on or after 2018, the maximum tax rate will be 5.25%.
What about sales taxes?
If the House passes this legislation and Governor Nixon signs it into law, Missouri state sales taxes would:
- Rise 0.1% each year for five years starting January 1, 2014; the current rate is 4%.
- For all calendar years beginning on or after January 1, 2018, the sales and use tax rate will be 4.5%.