COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:0872H.01I Bill No.:HB 223 Subject:Taxation and Revenue - Income; Tax Incentives; Taxation and Revenue - General;
Department of Revenue; Employees - Employers; Juries; Business and Commerce
Type:Original Date:March 20, 2025Bill Summary:This proposal authorizes an income tax deduction for employers who
provide pay regular wages to employees serving jury duty.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2026FY 2027FY 2028
General Revenue*
$0
Greater than or less
than ($367,498)
Greater than or less
than ($331,544)
Total Estimated Net
Effect on General
Revenue $0
Greater than or less
than ($367,498)
Greater than or less
than ($331,544)
*Oversight notes for the purpose of the fiscal note, Oversight assumes a top income tax rate of
4.7% in tax year 2025 (FY 2026) and future income tax rate reductions from SB 3 (2022) will
trigger consecutively (4.6% in FY 2027 and 4.5% in FY 2028+).
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on Other State
Funds $0$0$0
Numbers within parentheses: () indicate costs or losses. L.R. No. 0872H.01I
Bill No. HB 223
Page 2 of
March 20, 2025
KLP:LR:OD
ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2026FY 2027FY 2028General Revenue -
DOR 0 FTE1 FTE1 FTE
Total Estimated Net
Effect on FTE0 FTE1 FTE1 FTE
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Local Government$0$0$0 L.R. No. 0872H.01I
Bill No. HB 223
Page 3 of
March 20, 2025
KLP:LR:OD
FISCAL ANALYSIS
ASSUMPTION
143.1250 - Deduction for Jury Duty Compensation
Officials from the Office of Administration - Budget and Planning (B&P) note beginning
with tax year 2026, this proposal would allow businesses to deduct up to 100% of regular wages
paid to an employee serving jury duty. The deduction shall be applied to the employer's Missouri
taxable income and less any amount of jury duty compensation reimbursed to the employer.
B&P notes that regular wages are already deductible at the federal level. Missouri has rolling
conformity with the federal business expenses deduction; therefore, regular wages are also
already deducted from Missouri income tax. This proposal would grant an additional deduction
for the same wages paid.
B&P was unable to determine how many employers pay workers during jury duty; however, pay
is not mandatory in Missouri. Therefore, B&P estimates that this proposal will reduce TSR by an
unknown, could be significant, amount beginning FY27 (for tax year 2026 income tax returns).
Officials from the Department of Revenue (DOR) note when calculating state tax liability, a
taxpayer begins with their Federal adjusted gross income (FAGI) and then ends with their
Missouri adjusted gross income (MAGI). After all deductions the state tax liability is what
remains. This proposal attempts to create a state deduction for employers based on the payment
of wages to employees who serve jury duty as long as the employee gives their jury duty pay to
their employer. Therefore, the amount of wages would be subtracted from the MAGI to
determine tax liability.
It should be noted that these wages already are deducted by the employer on the federal level, see
26 U.S.C. § 162 on the federal tax return. This means that they are already subtracted from the
FAGI and not in the MAGI calculation. Adding this as a deduction to the Missouri return will
give these employers a 200% deduction for compensation to employees on jury duty in Missouri.
DOR is unable to estimate the number of employers who actually pay their employees for their
jury duty. DOR assumes this could have a fiscal impact exceeding $250,000 annually. DOR
notes that this starts with tax years beginning on or after January 1, 2026, and therefore, this will
not impact state revenue until January 2027 when the first returns are filed claiming the credit.
This would require DOR to change its MO-1040, MO-1120 & MO 1120S, MO-PTE & MO -
1065 forms at a cost of $2,200 each. Additionally, the department would have to update its
website and computer systems ($7,327). L.R. No. 0872H.01I
Bill No. HB 223
Page 4 of
March 20, 2025
KLP:LR:OD
DOR will need one Associate Customer Service Representative ($37,020) for every 14,700
errors and one for every 5,700 pieces of correspondence generated. DOR assumes the need for
one FTE to start and will seek additional FTE through the appropriation process.
Oversight will show the abovementioned 1 FTE for DOR for purposes of this fiscal note.
However, Oversight notes the first tax year in which taxpayers would qualify for the proposed
tax deduction is Tax Year 2026. Oversight notes individuals would not file their Tax Year 2026
tax returns until after January 1, 2027 (6 months after the beginning of Fiscal Year 2027).
Therefore, Oversight will report DOR’s administrative cost(s) beginning in Fiscal Year 2027,
assuming DOR can hire and train such FTE(s) within the first six (6) months of Fiscal Year
2027; before Tax Year 2026 tax returns would begin to be filed claiming the new/expanded tax
deductions.
Oversight notes current law does not require an employer to pay regular wages while an
employee is on jury duty. Oversight notes this proposal provides an income tax deduction for
employers who pay regular wages to employees serving jury duty.
Oversight notes according to the Missouri Courts 2023 Annual Report, there were 2,629 jury
trial days in Missouri in 2023. Assuming an average hourly wage of $29.38 per hour, hourly
jury compensation of $6/hr., and assuming 12 jurors per jury per day,
Oversight estimates about $5,804,832 could be eligible for deduction under this proposal.
($29/hr. * 8 hrs. * 2,629 jury trial days * 12 jurors per day - $1,514,304 in jury compensation
paid).
Oversight notes this proposal begins January 1, 2026, and therefore, this will not impact state
revenue until FY 2027.
Oversight notes the following fiscal impact to general revenue in proportion to the top tax rate
applied throughout the implementation of the tax rate reductions from SB 3 (2022).
Tax Rate2025 (FY26)2026 (FY27)2027 (FY28)+4.70%($272,827) ($272,827)4.60%($267,022) ($267,022)4.50%($261,217) ($261,217)
Oversight notes the above fiscal impact assumes all jurors receive wages from their employers
at an estimated average hourly rate. The actual fiscal impact depends upon the number of
employees and actual wage received by employees whose employer chooses to claim this
deduction. Therefore, Oversight will show a fiscal impact greater than or less than the figures in
the table above. L.R. No. 0872H.01I
Bill No. HB 223
Page 5 of
March 20, 2025
KLP:LR:OD
Oversight notes some jurisdictions may provide additional jury compensation such as mileage
allowance or per diem.
Oversight notes the state individual income tax rate (4.7% in tax year 2025) is to be reduced in
annual increments (if certain triggers are met) until it reaches 4.5%. This fiscal note reflects the
assumptions that the future individual income tax rate reductions pursuant to SB 3 (2022) will
occur consecutively.
Officials from the Oversight Division
pursuant to Section 23.253 RSMo; however, Oversight can absorb the cost with their current
budget authority.
Rule Promulgation
Officials from the Joint Committee on Administrative Rules assume this proposal is not
anticipated to cause a fiscal impact beyond its current appropriation.
Officials from the Office of the Secretary of State (SOS) note many bills considered by the
General Assembly include provisions allowing or requiring agencies to submit rules and
regulations to implement the act. The SOS is provided with core funding to handle a certain
amount of normal activity resulting from each year's legislative session. The fiscal impact for
this fiscal note to the SOS for Administrative Rules is less than $5,000. The SOS recognizes that
this is a small amount and does not expect that additional funding would be required to meet
these costs. However, the SOS also recognizes that many such bills may be passed by the
General Assembly in a given year and that collectively the costs may be in excess of what the
office can sustain with its core budget. Therefore, the SOS reserves the right to request funding
for the cost of supporting administrative rules requirements should the need arise based on a
review of the finally approved bills signed by the governor. L.R. No. 0872H.01I
Bill No. HB 223
Page 6 of
March 20, 2025
KLP:LR:OD
FISCAL IMPACT – State GovernmentFY 2026
(10 Mo.)
FY 2027FY 2028GENERAL REVENUECosts - DOR - §143.1250 Personnel Service$0($37,760)($38,516) Fringe Benefits$0($30,926)($31,229) Expense & Equipment$0($31,790)($582)Total Costs - $0($100,476)($70,327)FTE Change0 FTE1 FTE1 FTERevenue Reduction - §143.1250 -
Income tax deduction for wages paid to
employee during jury duty$0
Greater than or
less than
($267,022))
Greater than or
less than
($261,217
ESTIMATED NET EFFECT ON
GENERAL REVENUE
$0
Greater than
or less than
($367,498)
Greater than
or less than
($331,544)
Estimated Net FTE Change on General
Revenue
0 FTE1 FTE1 FTEFISCAL IMPACT – Local GovernmentFY 2026
(10 Mo.)
FY 2027FY 2028$0$0$0
FISCAL IMPACT – Small Business
Certain small businesses that qualify for the proposed deduction could be impacted by this
proposal.
FISCAL DESCRIPTION
Beginning January 1, 2026, an employer will be allowed a tax deduction of up to 100% of
regular wages paid to an employee serving jury duty, minus any amount of the employee's jury
duty compensation remitted to the employer.
If an employer is found to have violated certain state or federal laws affecting jury duty, that
employer will be deemed ineligible for the deduction under this bill for the tax year in which the
violation occurred. If the violation was discovered within one year of receiving the deduction, L.R. No. 0872H.01I
Bill No. HB 223
Page 7 of
March 20, 2025
KLP:LR:OD
the employer must repay to the state the amount of tax savings realized from the deduction.
These provisions sunset on December 31st, six years after the effective date.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Revenue
Office of Administration - Budget and Planning
Julie MorffJessica HarrisDirectorAssistant DirectorMarch 20, 2025March 20, 2025