The bill proposes significant changes to Missouri's income tax structure by repealing sections 143.011, 143.031, 143.131, and 143.177 of the Missouri Revised Statutes and enacting three new sections. It introduces a tax on Missouri taxable income for residents, with a top tax rate of 4.95% for tax years ending on or before December 31, 2026, and a reduced rate of 4.7% or the lower top rate in effect for tax years starting on or after January 1, 2027. The bill also allows for unlimited potential reductions in the tax rate until it reaches zero percent. Additionally, it modifies the Missouri standard deduction to align with federal standards and increases it by $4,000 for tax years beginning on or after January 1, 2027. The previous Missouri Working Family Tax Credit section is repealed, indicating a shift in tax credit administration. Moreover, the bill outlines new eligibility criteria and administration for tax credits, stipulating that the initial percentage and any increases can only be claimed if net general revenue exceeds the highest amount collected in the previous three fiscal years by at least $150 million. It empowers the department to identify eligible taxpayers using data from various sources, even if they did not apply for the credit. An annual report detailing tax credits issued, including total revenue expended and the average value of credits, is mandated. The director of the department is granted authority to create rules for administering these provisions, and notably, tax credits authorized under this bill will not be subject to existing requirements in sections 135.800 to 135.830.

Statutes affected:
Introduced (6018H.01): 143.011, 143.031, 143.131, 143.177