Bill > SB220

This bill modifies Missouri's income tax structure by implementing a phased approach to tax rate reduction. From tax years beginning on or after January 1, 2023, but before January 1, 2026, the top income tax rate will be capped at 4.95%, with a tax table that progressively increases tax rates from 1.5% to 6% based on income brackets. Starting January 1, 2026, the bill establishes a flat 4% tax rate for all residents. The bill also includes a potential future mechanism for further tax rate reductions contingent on specific revenue conditions, which would require the adoption of a constitutional amendment creating a tax reform fund. Additionally, the bill adjusts federal income tax deductions for individual taxpayers based on their gross income, with deduction percentages ranging from 0% to 35% depending on income levels. For tax years beginning on or after January 1, 2026, the bill eliminates the federal income tax deduction for both individual and corporate taxpayers. The tax brackets will be adjusted annually for inflation until December 31, 2025, and the changes are designed to provide gradual tax relief while maintaining state revenue stability.

Labor and Employment

https://www.senate.mo.gov/25info/BTS_Web/Bill.aspx?SessionType=R&BillID=296