Bill > SB228

This bill modifies Missouri's income tax structure with several key provisions. For tax years through December 31, 2025, the state will maintain a graduated income tax rate ranging from 1.5% to 6%, with provisions for annual inflation adjustments to tax brackets. Starting in 2023, the top tax rate is capped at 4.95%. For tax years beginning January 1, 2026, the bill establishes a flat 4% income tax rate for all residents. The bill also introduces a potential future tax rate reduction mechanism tied to state revenue performance, which would require a constitutional amendment creating a tax reform fund. Additionally, the bill modifies the federal income tax deduction for individual taxpayers, allowing a percentage-based deduction based on gross income levels through 2025, with the deduction percentage decreasing as income increases. For tax years starting January 1, 2026, the bill eliminates the federal income tax deduction for both individual and corporate taxpayers. The changes are designed to provide gradual tax relief while maintaining state revenue stability, with specific provisions to adjust tax rates based on economic conditions.

Labor and Employment

https://www.senate.mo.gov/25info/BTS_Web/Bill.aspx?SessionType=R&BillID=357