EXPLANATION- Matter enclosed in bold-faced brackets [thus] in this bill is not enacted
and is intended to be omitted in the law.
FIRST REGULAR SESSION
SENATE BILL NO. 228
103RD GENERAL ASSEMBLY
INTRODUCED BY SENATOR CARTER.
1399S.01I KRISTINA MARTIN, Secretary
AN ACT
To repeal sections 143.011, 143.021, and 143.171, RSMo, and to enact in lieu thereof three new
sections relating to income taxes.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Sections 143.011, 143.021, and 143.171, RSMo, 1
are repealed and three new sections enacted in lieu thereof, to 2
be known as sections 143.011, 143.021, and 143.171, to read as 3
follows:4
143.011. 1. For all tax years beginning on or before 1
December 31, 2025, a tax is hereby imposed for every taxable 2
year on the Missouri taxable income of every resident. The 3
tax shall be determined by applying the tax table or the 4
rate provided in section 143.021, which is based upon the 5
following rates: 6
7
8
If the Missouri
taxable income is:
The tax is:
9
10
Not over $1,000.00 1 1/2% of the Missouri
taxable income
11
12
Over $1,000 but not
over $2,000
$15 plus 2% of excess over
$1,000
13
14
Over $2,000 but not
over $3,000
$35 plus 2 1/2% of excess
over $2,000
SB 228 2
2. (1) Notwithstanding the provisions of subsection 1 29
of this section to the contrary, beginning with the 2023 30
calendar year, but ending on or before December 31, 2025, 31
the top rate of tax pursuant to subsection 1 of this section 32
shall be four and ninety-five hundredths percent. 33
(2) The modification of tax rates made pursuant to 34
this subsection shall apply only to tax years that begin on 35
or after January 1, 2023, but before January 1, 2026. 36
(3) The director of the department of revenue shall, 37
by rule, adjust the tax table provided in subsection 1 of 38
this section to effectuate the provisions of this 39
subsection. The top remaining rate of tax shall apply to 40
all income in excess of seven thousand dollars, as adjusted 41
pursuant to subsection 5 of this section. 42
3. (1) [In addition to the rate reduction under 43
subsection 2 of this section, beginning with the 2024 44
15
16
Over $3,000 but not
over $4,000
$60 plus 3% of excess over
$3,000
17
18
Over $4,000 but not
over $5,000
$90 plus 3 1/2% of excess
over $4,000
19
20
Over $5,000 but not
over $6,000
$125 plus 4% of excess over
$5,000
21
22
Over $6,000 but not
over $7,000
$165 plus 4 1/2% of excess
over $6,000
23
24
Over $7,000 but not
over $8,000
$210 plus 5% of excess over
$7,000
25
26
Over $8,000 but not
over $9,000
$260 plus 5 1/2% of excess
over $8,000
27
28
Over $9,000 $315 plus 6% of excess over
$9,000
SB 228 3
calendar year, the top rate of tax under subsection 1 of 45
this section may be reduced by fifteen hundredths of a 46
percent. A reduction in the rate of tax shall take effect 47
on January first of a calendar year and such reduced rates 48
shall continue in effect until the next reduction occurs. 49
(2) A reduction in the rate of tax shall only occur if 50
the amount of net general revenue collected in the previous 51
fiscal year exceeds the highest amount of net general 52
revenue collected in any of the three fiscal years prior to 53
such fiscal year by at least one hundred seventy-five 54
million dollars. 55
(3) Any modification of tax rates under this 56
subsection shall only apply to tax years that begin on or 57
after a modification takes effect. 58
(4) The director of the department of revenue shall, 59
by rule, adjust the tax tables under subsection 1 of this 60
section to effectuate the provisions of this subsection. 61
4. (1) In addition to the rate reductions under 62
subsections 2 and 3 of this section, beginning with the 63
calendar year immediately following the calendar year in 64
which a reduction is made pursuant to subsection 3 of this 65
section, the top rate of tax under subsection 1 of this 66
section may be further reduced over a period of years. Each 67
reduction in the top rate of tax shall be by one-tenth of a 68
percent and no more than one reduction shall occur in a 69
calendar year. No more than three reductions shall be made 70
under this subsection. Reductions in the rate of tax shall 71
take effect on January first of a calendar year and such 72
reduced rates shall continue in effect until the next 73
reduction occurs. 74
(2) (a) A reduction in the rate of tax shall only 75
occur if: 76 SB 228 4
a. The amount of net general revenue collected in the 77
previous fiscal year exceeds the highest amount of net 78
general revenue collected in any of the three fiscal years 79
prior to such fiscal year by at least two hundred million 80
dollars; and 81
b. The amount of net general revenue collected in the 82
previous fiscal year exceeds the amount of net general 83
revenue collected in the fiscal year five years prior, 84
adjusted annually by the percentage increase in inflation 85
over the preceding five fiscal years. 86
(b) The amount of net general revenue collected 87
required by subparagraph a. of paragraph (a) of this 88
subdivision in order to make a reduction pursuant to this 89
subsection shall be adjusted annually by the percent 90
increase in inflation beginning with January 2, 2023. 91
(3) Any modification of tax rates under this 92
subsection shall only apply to tax years that begin on or 93
after a modification takes effect. 94
(4) The director of the department of revenue shall, 95
by rule, adjust the tax tables under subsection 1 of this 96
section to effectuate the provisions of this subsection. 97
The bracket for income subject to the top rate of tax shall 98
be eliminated once the top rate of tax has been reduced 99
below the rate applicable to such bracket, and the top 100
remaining rate of tax shall apply to all income in excess of 101
the income in the second highest remaining income bracket.] 102
For all tax years beginning on or after January 1, 2026, a 103
tax of four percent is hereby imposed on the Missouri 104
taxable income of every resident of this state. The tax 105
shall be determined by the application of the income 106
provisions provided under section 143.021. 107 SB 228 5
(2) The department of revenue shall, by rule and by 108
posting on the department's website, adjust the appropriate 109
tax rate to effectuate the provisions of this subsection. 110
4. (1) Upon adoption of a constitutional amendment 111
authorizing the creation of the tax reform fund, in addition 112
to the rate reductions made pursuant to subsection 3 of this 113
section, beginning with the 2027 calendar year, the tax rate 114
imposed pursuant to subsection 3 of this section may be 115
reduced over a period of years pursuant to subdivision (2) 116
of this subsection. A reduction in the rate of tax shall 117
take effect on January first of the immediately succeeding 118
calendar year and such reduced rate shall continue in effect 119
until the next reduction occurs. 120
(2) A reduction in the rate of tax shall occur if the 121
amount of net general revenue collected in the immediately 122
previous fiscal year exceeds anticipated general fund 123
revenue expenditures for such fiscal year by at least one 124
million dollars and the minimum balance in the tax reform 125
fund is at least one hundred twenty million dollars at the 126
close of the fiscal year. The amount of the reduction shall 127
be calculated as follows: 128
(a) For the first one hundred twenty million dollars 129
in the tax reform fund, one-tenth of one percent; plus 130
(b) For each additional sixty million dollars in 131
excess of the minimum balance, one-twentieth of one percent. 132
(3) Any modification of the tax rate made pursuant to 133
this subsection shall apply only to tax years that begin on 134
or after the date a modification takes effect. 135
(4) The director of the department of revenue shall 136
adjust and publish the tax rate as adjusted pursuant to this 137
subsection to effectuate the provisions of this subsection. 138 SB 228 6
5. Beginning with the 2017 calendar year, and ending 139
on or before December 31, 2025, the brackets of Missouri 140
taxable income identified in subsection 1 of this section 141
shall be adjusted annually by the percent increase in 142
inflation. The director shall publish such brackets 143
annually beginning on or after October 1, 2016. 144
Modifications to the brackets shall take effect on January 145
first of each calendar year and shall apply to tax years 146
beginning on or after the effective date of the new brackets. 147
6. As used in this section, the following terms mean: 148
(1) "CPI", the Consumer Price Index for All Urban 149
Consumers for the United States as reported by the Bureau of 150
Labor Statistics, or its successor index; 151
(2) "CPI for the preceding calendar year", the average 152
of the CPI as of the close of the twelve-month period ending 153
on August thirty-first of such calendar year; 154
(3) "Net general revenue collected", all revenue 155
deposited into the general revenue fund, less refunds and 156
revenues originally deposited into the general revenue fund 157
but designated by law for a specific distribution or 158
transfer to another state fund; 159
(4) "Percent increase in inflation", the percentage, 160
if any, by which the CPI for the preceding calendar year 161
exceeds the CPI for the year beginning September 1, 2014, 162
and ending August 31, 2015. 163
143.021. 1. Every resident having a taxable income 1
shall determine his or her tax from the rates provided in 2
section 143.011. For all tax years beginning on or before 3
December 31, 2022, there shall be no tax on a taxable income 4
of less than one hundred dollars. 5
2. (1) Notwithstanding the provisions of subsection 1 6
of section 143.011 to the contrary, for all tax years 7 SB 228 7
beginning on or after January 1, 2023, but on or before 8
December 31, 2025, there shall be no tax on taxable income 9
of less than or equal to one thousand dollars, as adjusted 10
pursuant to subsection 5 of section 143.011. 11
(2) The modifications made pursuant to this subsection 12
shall only apply to tax years that begin on or after January 13
1, 2023, but on or before December 31, 2025. 14
(3) The director of the department of revenue shall, 15
by rule, adjust the tax table provided in subsection 1 of 16
section 143.011 to effectuate the provisions of this 17
subsection. 18
3. Notwithstanding the provisions of subsection 3 of 19
section 143.011 to the contrary, for all tax years beginning 20
on or after January 1, 2026, there shall be no tax on 21
taxable income of less than or equal to one thousand dollars. 22
143.171. 1. For all tax years beginning on or after 1
January 1, 1994, and ending on or before December 31, 2018, 2
an individual taxpayer shall be allowed a deduction for his 3
or her federal income tax liability under Chapter 1 of the 4
Internal Revenue Code for the same taxable year for which 5
the Missouri return is being filed, not to exceed five 6
thousand dollars on a single taxpayer's return or ten 7
thousand dollars on a combined return, after reduction for 8
all credits thereon, except the credit for payments of 9
federal estimated tax, the credit for the overpayment of any 10
federal tax, and the credits allowed by the Internal Revenue 11
Code by 26 U.S.C. Section 31, 26 U.S.C. Section 27, and 26 12
U.S.C. Section 34. 13
2. (1) Notwithstanding any other provision of law to 14
the contrary, for all tax years beginning on or after 15
January 1, 2019, but on or before December 31, 2025, an 16
individual taxpayer shall be allowed a deduction equal to a 17 SB 228 8
percentage of his or her federal income tax liability under 18
Chapter 1 of the Internal Revenue Code for the same taxable 19
year for which the Missouri return is being filed, not to 20
exceed five thousand dollars on a single taxpayer's return 21
or ten thousand dollars on a combined return, after 22
reduction for all credits thereon, except the credit for 23
payments of federal estimated tax, the credit for the 24
overpayment of any federal tax, and the credits allowed by 25
the Internal Revenue Code by 26 U.S.C. Section 31, 26 U.S.C. 26
Section 27, and 26 U.S.C. Section 34. The deduction 27
percentage is determined according to the following table: 28
(2) Notwithstanding any provision of law to the 36
contrary, the amount of any tax credits reducing a 37
taxpayer's federal tax liability pursuant to Public Law 116- 38
136 or 116-260, enacted by the 116th United States Congress, 39
for the tax year beginning on or after January 1, 2020, and 40
ending on or before December 31, 2020, and the amount of any 41
tax credits reducing a taxpayer's federal tax liability 42
under any other federal law that provides direct economic 43
impact payments to taxpayers to mitigate financial 44
challenges related to the COVID-19 pandemic shall not be 45
29
30
If the Missouri gross income
on the return is:
The deduction
percentage is:
31 $25,000 or less 35 percent
32 From $25,001 to $50,000 25 percent
33 From $50,001 to $100,000 15 percent
34 From $100,001 to $125,000 5 percent
35 $125,001 or more 0 percent SB 228 9
considered in determining a taxpayer's federal tax liability 46
for the purposes of subdivision (1) of this subsection. 47
3. For all tax years beginning on or after September 48
1, 1993, but on or before December 31, 2025, a corporate 49
taxpayer shall be allowed a deduction for fifty percent of 50
its federal income tax liability under Chapter 1 of the 51
Internal Revenue Code for the same taxable year for which 52
the Missouri return is being filed after reduction for all 53
credits thereon, except the credit for payments of federal 54
estimated tax, the credit for the overpayment of any federal 55
tax, and the credits allowed by the Internal Revenue Code by 56
26 U.S.C. Section 31, 26 U.S.C. Section 27, and 26 U.S.C. 57
Section 34. 58
4. For all tax years beginning on or before December 59
31, 2025, if a federal income tax liability for a tax year 60
prior to the applicability of sections 143.011 to 143.996 61
for which he or she was not previously entitled to a 62
Missouri deduction is later paid or accrued, he or she may 63
deduct the federal tax in the later year to the extent it 64
would have been deductible if paid or accrued in the prior 65
year. 66
5. For all tax years beginning on or after January 1, 67
2026, there shall be no federal income tax deduction for any 68
individual or corporate taxpayer under this section. 69