Among its key provisions, the bill introduces an endowment tax at a rate of 1.9% on the aggregate fair market value of assets for institutions defined as 'qualifying' based on their affiliation with abortion facilities or related educational programs. This move has the potential to generate significant revenue for the state, as the revenues collected from this tax are earmarked for the general revenue fund. The legislation sets parameters for the tax rate adjustments based on the state's economic performance and revenue collection thresholds, emphasizing an adaptive approach to maintaining fiscal stability.
Summary
Senate Bill 1143 proposes significant modifications to the taxation framework in Missouri, primarily targeting the taxation of income and endowments for qualifying institutions of higher education. The bill repeals an existing section of the tax code and introduces new regulations that establish a tax rate for Missouri residents based on taxable income, which begins at 1.5% for income not exceeding $1,000 and gradually increases for higher brackets. Notably, starting in 2023, the top rate of taxation will be set at 4.95%, with provisions for future reductions depending on state revenue performance.
Contention
The introduction of the endowment tax specifically has drawn scrutiny and debate among stakeholders. Proponents argue that taxing endowments of institutions involved in abortion-related training is a necessary measure to ensure that state funding does not support activities opposed by certain constituents. Conversely, opponents raise concerns about the implications for higher education funding, apprehending that such taxes could disadvantage educational institutions and limit their financial capabilities in providing services and scholarships, particularly in a politically charged environment surrounding abortion and healthcare education.