Missouri Legislature passes individual income tax cut
JEFFERSON CITY, Mo. (AP) — Missouri lawmakers on Thursday passed a bill to cut the individual income tax rate from its current 5.9 percent to 5.5 percent for most residents, a big win for Republicans in the final hours of the 2018 annual session.
The bill would kick in more quickly and deepen tax cuts that are already set to occur. A tax reduction passed by lawmakers in 2014 would gradually lower the top tax rate by 0.1 percent a year down to 5.5 percent depending on state revenue growth.
Under House Speaker Pro Tem Elijah Haahr’s bill, the top income tax rate would drop 0.4 percent starting in January. Individuals would gradually see the rate drop to 5.1 percent over time if the state meets revenue targets.
To offset the loss in revenue, lawmakers this year proposed reducing a federal income tax deduction. Earlier estimates of the bill would put its cost at $5.8 million if fully implemented in fiscal year 2023, but that doesn’t cover some changes made in the Senate.
House lawmakers voted 101-40 in favor of the bill, which passed the Senate 24-9 on Tuesday. Friday is the deadline to pass legislation.
“These are common sense, fiscally responsible, bold solutions that will lower the overall tax burden on Missouri families and businesses,” said Haahr, a Springfield Republican, in a Thursday statement.
Democrats slammed the late-session move to pass the bill without another check on its potential financial impact.
“It definitely concerns me how quickly we are trying to push this through without accurate numbers,” Springfield Rep. Crystal Quade said.
Still pending is a proposal to cut the corporate income tax rate from its current 6.25 percent to 4 percent, which passed the Senate 23-9 late Thursday night. To balance out the loss in revenue, the legislation would change how some multistate corporations can calculate their taxable income.
The measure needs another vote of approval from the House to pass.
Associated Press writer Blake Nelson contributed to this report.