The bill proposes the repeal of several existing sections of Missouri tax law and introduces new provisions regarding taxation. It establishes a tax on the Missouri taxable income of residents, with specific rates applicable for tax years beginning on or before December 31, 2026. Notably, the top tax rate will be set at 4.95% for income exceeding $7,000 during this period. For tax years starting on or after January 1, 2027, the tax rate will be adjusted to 4.7% or the top rate in effect on that date, whichever is lower. Additionally, the bill allows for potential reductions in the tax rate based on net general revenue collected, with specific conditions outlined for such reductions. The bill also modifies the calculation of combined taxable income for married couples filing jointly, ensuring that for tax years ending on or before December 31, 2026, each spouse's taxable income is proportionate to their adjusted gross income. Starting January 1, 2027, a single column will be used for calculating total combined adjusted gross income. Furthermore, the Missouri standard deduction will align with the federal standard deduction, with an additional $4,000 added for tax years beginning on or after January 1, 2027. The bill includes provisions for the adjustment of tax brackets based on inflation and repeals the Missouri Working Family Tax Credit Act, replacing it with new tax credit provisions contingent on revenue thresholds.

Statutes affected:
Introduced (5919H.02): 143.011, 143.031, 143.131, 143.177, 143.512