1283S.04C
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SENATE COMMITTEE SUBSTITUTE
FOR
SENATE BILLS NOS. 151, 138, 220, 146, 228, & 161
AN ACT
To repeal sections 143.011, 143.021, 143.071, and
143.171, RSMo, and to enact in lieu thereof five new
sections relating to taxation, with a contingent
effective date for certain sections.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Sections 143.011, 143.021, 143.071, and
143.171, RSMo, are repealed and five new sections enacted in
lieu thereof, to be known as sections 143.011, 143.021, 143.071,
143.171, and 144.002, to read as follows:
143.011. 1. A tax is hereby imposed for every taxable
year on the Missouri taxable income of every resident. The
tax shall be determined by applying the tax table or the
rate provided in section 143.021, which is based upon the
following rates:
If the Missouri taxable
income is:
The tax is:
Not over $1,000.00 1 1/2% of the Missouri taxable
income
Over $1,000 but not over
$2,000
$15 plus 2% of excess over
$1,000
Over $2,000 but not over
$3,000
$35 plus 2 1/2% of excess over
$2,000
Over $3,000 but not over
$4,000
$60 plus 3% of excess over
$3,000
Over $4,000 but not over
$5,000
$90 plus 3 1/2% of excess over
$4,000
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2. (1) Notwithstanding the provisions of subsection 1
of this section to the contrary, beginning with the 2023
calendar year, the top rate of tax pursuant to subsection 1
of this section shall be four and ninety -five hundredths
percent.
(2) The modification of tax rates made pursuant to
this subsection shall apply only to tax years that begin on
or after January 1, 2023.
(3) The director of the department of revenue shall,
by rule, adjust the tax table provided in subsec tion 1 of
this section to effectuate the provisions of this
subsection. The top remaining rate of tax shall apply to
all income in excess of seven thousand dollars, as adjusted
pursuant to subsection 5 of this section.
3. (1) In addition to the rate reduction under
subsection 2 of this section, beginning with the 2024
calendar year, the top rate of tax under subsection 1 of
this section may be reduced by fifteen hundredths of a
percent. A reduction in the rate of tax shall take effect
on January first of a calendar year and such reduced rates
shall continue in effect until the next reduction occurs.
Over $5,000 but not over
$6,000
$125 plus 4% of excess over
$5,000
Over $6,000 but not over
$7,000
$165 plus 4 1/2% of excess over
$6,000
Over $7,000 but not over
$8,000
$210 plus 5% of excess over
$7,000
Over $8,000 but not over
$9,000
$260 plus 5 1/2% of excess over
$8,000
Over $9,000 $315 plus 6% of excess over
$9,000
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(2) A reduction in the rate of tax shall only occur if
the amount of net general revenue collected in the previous
fiscal year exceeds the highest amount of net general
revenue collected in any of the three fiscal years prior to
such fiscal year by at least one hundred seventy -five
million dollars.
(3) Any modification of tax rates under this
subsection shall only apply to tax years that begin on or
after a modification takes effect.
(4) The director of the department of revenue shall,
by rule, adjust the tax tables under subsection 1 of this
section to effectuate the provisions of this subsection.
4. (1) In addition to the rate reductions under
subsections 2 and 3 of this section, beginning with the
calendar year immediately following the calendar year in
which a reduction is made pursuant to subsection 3 of this
section, the top rate of tax under subsection 1 of this
section may be further reduced over a period of years. Each
reduction in the top rate of tax shall be by one -tenth of a
percent and no more than one reduction shall occur in a
calendar year. No more than three reductions shall be made
under this subsection. Reductions in the rate of tax shall
take effect on January first of a calendar year and such
reduced rates shall continue in effect until the next
reduction occurs.
(2) (a) A reduction in the rate of tax shall only
occur if:
a. The amount of net general revenue collected in the
previous fiscal year exceeds the highest amount of net
general revenue collected in any of the three fiscal years
prior to such fiscal year by at least two hundred million
dollars; and
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b. The amount of net general revenue collected in the
previous fiscal year exceeds the amount of net general
revenue collected in the fiscal year five years prior,
adjusted annually by the percentage increase in inflation
over the preceding five fiscal years.
(b) The amount of net general revenue collected
required by subparagraph a. of paragraph (a) of this
subdivision in order to make a reduction pursuant to this
subsection shall be adjusted annually by the percent
increase in inflation begin ning with January 2, 2023.
(3) Any modification of tax rates under this
subsection shall only apply to tax years that begin on or
after a modification takes effect.
(4) The director of the department of revenue shall,
by rule, adjust the tax tables under subsection 1 of this
section to effectuate the provisions of this subsection.
The bracket for income subject to the top rate of tax shall
be eliminated once the top rate of tax has been reduced
below the rate applicable to such bracket, and the top
remaining rate of tax shall apply to all income in excess of
the income in the second highest remaining income bracket.
5. Beginning with the 2017 calendar year, the brackets
of Missouri taxable income identified in subsection 1 of
this section shall be adjusted annually by the percent
increase in inflation. The director shall publish such
brackets annually beginning on or after October 1, 2016.
Modifications to the brackets shall take effect on January
first of each calendar yea r and shall apply to tax years
beginning on or after the effective date of the new brackets.
6. As used in this section, the following terms mean:
(1) "CPI", the Consumer Price Index for All Urban
Consumers for the United States as reported b y the Bureau of
Labor Statistics, or its successor index;
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(2) "CPI for the preceding calendar year", the average
of the CPI as of the close of the twelve -month period ending
on August thirty-first of such calendar year;
(3) "Net general revenue collected", all revenue
deposited into the general revenue fund, less refunds and
revenues originally deposited into the general revenue fund
but designated by law for a specific distribution or
transfer to another state fund;
(4) "Percent increase in inflation", the percentage,
if any, by which the CPI for the preceding calendar year
exceeds the CPI for the year beginning September 1, 2014,
and ending August 31, 2015.
7. For all tax years beginning on or after January
first immediately following the adoption of a constitutional
amendment eliminating the imposition of Missouri personal
income tax, there shall be no Missouri personal income tax
imposed under this provisions of this section or this
chapter.
143.021. 1. Every resident having a taxable income
shall determine his or her tax from the rates provided in
section 143.011. For all tax years beginning on or before
December 31, 2022, there shall be no tax on a taxable income
of less than one hundred dolla rs.
2. (1) Notwithstanding the provisions of subsection 1
of section 143.011 to the contrary, for all tax years
beginning on or after January 1, 2023, but on or before
December 31, 2025, there shall be no tax on taxable income
of less than or equal to one thousand dollars, as adjusted
pursuant to subsection 5 of section 143.011.
(2) The modifications made pursuant to this subsection
shall only apply to tax years that begin on or after January
1, 2023, but on or before December 31, 2025 .
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(3) The director of the department of revenue shall,
by rule, adjust the tax table provided in subsection 1 of
section 143.011 to effectuate the provisions of this
subsection.
3. Notwithstanding the provisions of subsection 3 of
section 143.011 to the contrary, for all tax years beginning
on or after January 1, 2026, there shall be no tax on
taxable income of less than or equal to one thousand dollars.
143.071. 1. For all tax years beginning before
September 1, 1993, a t ax is hereby imposed upon the Missouri
taxable income of corporations in an amount equal to five
percent of Missouri taxable income.
2. For all tax years beginning on or after September
1, 1993, and ending on or before December 31, 2019, a tax is
hereby imposed upon the Missouri taxable income of
corporations in an amount equal to six and one -fourth
percent of Missouri taxable income.
3. For all tax years beginning on or after January 1,
2020, a tax is hereby imposed upon the Missouri tax able
income of corporations in an amount equal to four percent of
Missouri taxable income.
4. The provisions of this section shall not apply to
out-of-state businesses operating under sections 190.270 to
190.285.
5. (1) Upon the adoption of a constitutional
amendment authorizing the creation of the tax reform fund as
provided under article X, section 20(a) of the constitution
of Missouri, beginning with the calendar year immediately
following the calendar year in which the total state s ales
tax rate was reduced to a rate of four percent or less under
section 144.002, the tax rate imposed under subsection 3 of
this section may be reduced over a period of years under
subdivision (2) of this subsection. A reduction in the rate
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of tax shall take effect on January first of the immediately
succeeding calendar year and such reduced rate shall
continue in effect until the next reduction occurs.
(2) A reduction in the rate of tax shall occur if, at
the close of the immediately prece ding fiscal year, a
surplus of one million dollars or more is realized in the
general revenue fund and the minimum balance in the tax
reform fund is at least forty -five million dollars at the
close of the same fiscal year. The amount of the reduction
made under this subsection shall be calculated as follows:
(a) For the first forty-five million dollars in the
tax reform fund, one -fifth of one percent; plus
(b) For each additional forty -five million dollars in
excess of the minimum balance in the tax reform fund, one -
fifth of one percent.
(3) Any modification of the tax rate made under this
subsection shall apply only to calendar years that begin on
or after the date a modification takes effect.
(4) The director of the depart ment of revenue shall
adjust and publish the tax rate as adjusted pursuant to this
subsection to effectuate the provisions of this subsection.
143.171. 1. For all tax years beginning on or after
January 1, 1994, and ending on or before December 31, 2018,
an individual taxpayer shall be allowed a deduction for his
or her federal income tax liability under Chapter 1 of the
Internal Revenue Code for the same taxable year for which
the Missouri return is being filed, not to exceed five
thousand dollars on a single taxpayer's return or ten
thousand dollars on a combined return, after reduction for
all credits thereon, except the credit for payments of
federal estimated tax, the credit for the overpayment of any
federal tax, and the c redits allowed by the Internal Revenue
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Code by 26 U.S.C. Section 31, 26 U.S.C. Section 27, and 26
U.S.C. Section 34.
2. (1) Notwithstanding any other provision of law to
the contrary, for all tax years beginning on or after
January 1, 2019, but on or before December 31, 2025, an
individual taxpayer shall be allowed a deduction equal to a
percentage of his or her federal income tax liability under
Chapter 1 of the Internal Revenue Code for the same taxable
year for which the Missouri return is being filed, not to
exceed five thousand dollars on a single taxpayer's return
or ten thousand dollars on a combined return, after
reduction for all credits thereon, except the credit for
payments of federal estimated tax, the credit for the
overpayment of any federal tax, and the credits allowed by
the Internal Revenue Code by 26 U.S.C. Section 31, 26 U.S.C.
Section 27, and 26 U.S.C. Section 34. The deduction
percentage is determined according to the following table:
(2) Notwithstanding any provision of law to the
contrary, the amount of any tax credits reducing a
taxpayer's federal tax liability pursuant to Public Law 116 -
136 or 116-260, enacted by the 116th United States Congress,
for the tax year beginning on or after January 1, 2020, and
ending on or before December 31, 2020, and the amount of any
If the Missouri gross income
on the return is:
The deduction
percentage is:
$25,000 or less 35 percent
From $25,001 to $50,000 25 percent
From $50,001 to $100,000 15 percent
From $100,001 to $125,000 5 percent
$125,001 or more 0 percent
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tax credits reducing a taxpayer's federal tax liability
under any other federal law that provides direct ec onomic
impact payments to taxpayers to mitigate financial
challenges related to the COVID -19 pandemic shall not be
considered in determining a taxpayer's federal tax liability
for the purposes of subdivision (1) of this subsection.
3. For all tax years beginning on or after September
1, 1993, but on or before December 31, 2025, a corporate
taxpayer shall be allowed a deduction for fifty percent of
its federal income tax liability under Chapter 1 of the
Internal Revenue Code for the same taxabl e year for which
the Missouri return is being filed after reduction for all
credits thereon, except the credit for payments of federal
estimated tax, the credit for the overpayment of any federal
tax, and the credits allowed by the Internal Revenue Cod e by
26 U.S.C. Section 31, 26 U.S.C. Section 27, and 26 U.S.C.
Section 34.
4. For all tax years beginning on or before December
31, 2025, if a federal income tax liability for a tax year
prior to the applicability of sections 143.011 to 143.996
for which he or she was not previously entitled to a
Missouri deduction is later paid or accrued, he or she may
deduct the federal tax in the later year to the extent it
would have been deductible if paid or accrued in the prior
year.
5. For all tax years beginning on or after January 1,
2026, there shall be no federal income tax deduction for any
individual or corporate taxpayer under this section.
144.002. 1. For all calendar years beginning on or
after January first of the calendar year immediately
following the adoption of a constitutional amendment
authorizing the elimination of the Missouri personal income
tax under article X, section 1(a) of the constitution of
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Missouri and authorizing the creation of the tax reform
fund, the total state sales tax rate levied or imposed shall
be reduced by twenty -five thousandths of one percent.
2. (1) Beginning with the calendar year in which the
rate reduction made under subsection 1 of this section is
imposed, the total s tate sales tax rate may be reduced over
a period of years as provided under subdivision (2) of this
subsection and authorized under article X, section 20(a) of
the constitution of Missouri. A reduction in the rate of
tax shall take effect on January f irst of the immediately
succeeding calendar year and such reduced rate shall
continue in effect until the next reduction occurs.
(2) A reduction in the rate of tax shall occur if, at
the close of the immediately preceding fiscal year, a
surplus of one million dollars or more is realized in the
general revenue fund and the minimum balance in the tax
reform fund is at least forty -five million dollars at the
close of the same fiscal year. The amount of the state
sales tax reduction shall be calc ulated as follows:
(a) For the first forty-five million dollars in the
tax reform fund, one -hundredth of one percent; plus
(b) For each additional forty -five million dollars in
excess of the minimum balance in the tax reform fund, one -
hundredth of one percent.
(3) Any modification of the tax rate made under this
subsection shall apply only to calendar years that begin on
or after the date a modification takes effect.
(4) The director of the department of revenue shall
adjust and publish the tax rate as adjusted pursuant to this
subsection to effectuate the provisions of this subsection.
3. The total rate of state sales tax as reduced under
the provisions of this section shall be capped at a rate not
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to exceed four perce nt, as provided under article X, section
26 of the constitution of Missouri.
4. The department of revenue may promulgate all
necessary rules and regulations for the administration of
this section. Any rule or portion of a rule, as that term
is defined in section 536.010, that is created under the
authority delegated in this section shall become effective
only if it complies with and is subject to all of the
provisions of chapter 536 and, if applicable, section
536.028. This section and chapt er 536 are nonseverable and
if any of the powers vested with the general assembly
pursuant to chapter 536 to review, to delay the effective
date, or to disapprove and annul a rule are subsequently
held unconstitutional, then the grant of rulemaking
authority and any rule proposed or adopted after the
effective date of this section, shall be invalid and void.
Section B. The enactment of section 144.002 and the
repeal and reenactment of sections 143.011 and 143.071 of
section A of this act shall become effective only upon the
passage and approval by the voters of a constitutional
amendment submitted to them by the 103rd General Assembly,
First Regular Session, eliminating the Missouri personal
income tax, authorizing the establishm ent of a surplus
revenue fund under Article X, Section 20(a) of the
Constitution of Missouri, and establishing a cap on certain
state sales taxes under Article X, Section 26 of the
Constitution of Missouri.