Missouri 2025 Regular Session

Missouri Senate Bill SB151 Latest Draft

Bill / Comm Sub Version Filed 02/19/2025

                            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143.171, RSMo, are repealed and five new sections enacted in 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.