Bill > SB138

This bill modifies Missouri's income tax structure with several key provisions. From 2023 to 2025, the state will maintain a graduated income tax rate ranging from 1.5% to 6%, with the top rate temporarily reduced to 4.95%. Starting January 1, 2026, the tax rate will be a flat 4%, which represents a simplification of the current progressive tax system. The bill also introduces a potential future tax rate reduction mechanism tied to net general revenue performance, contingent upon the creation of a tax reform fund through a constitutional amendment. For individual taxpayers, the bill adjusts the federal income tax deduction based on gross income levels, offering a sliding scale of deduction percentages between 0% and 35% through 2025. Additionally, the bill specifies that tax brackets will be adjusted annually for inflation until the end of 2025. After 2026, the bill eliminates the federal income tax deduction for both individual and corporate taxpayers. The legislation aims to gradually reduce income tax rates while maintaining state revenue stability, with provisions designed to trigger rate reductions only when specific fiscal conditions are met.

Labor and Employment

https://www.senate.mo.gov/25info/BTS_Web/Bill.aspx?SessionType=R&BillID=154