Bill > HB1112

This bill modifies Missouri's income tax structure by implementing a phased approach to tax rate reductions. For tax years through December 31, 2025, the state will maintain a graduated income tax rate system with rates ranging from 1.5% to 4.95% based on taxable income levels. Starting January 1, 2026, the bill establishes a flat 4% tax rate for all residents. The bill also introduces a potential future mechanism for additional tax rate reductions contingent upon the creation of a tax reform fund, where tax rates could be further reduced by 0.1% to 0.2% based on surplus general revenue and the fund's balance. The legislation adjusts income tax brackets annually for inflation through 2025 and modifies the federal income tax deduction, providing a percentage-based deduction for individual taxpayers based on their gross income levels until the end of 2025. After January 1, 2026, the federal income tax deduction will be eliminated for both individual and corporate taxpayers. These changes aim to gradually simplify the state's tax structure and potentially provide tax relief for Missouri residents.

https://house.mo.gov/Bill.aspx?bill=HB1112&year=2025&code=R